Canadian consultancy bids for Opus International, biggest investor accepts
WSP Global Inc, a Canadian listed consultancy firm, has offered an 87 percent premium for Opus International Consultants, winning support from its biggest shareholder.
WSP is offering $1.78 a share for Opus, which closed at 99 cents on the NZX on Friday. The offer values Opus at $263 million. WSP chief executive Alexandre L'Heureux said the offer allows Opus to declare a fully imputed dividend of 7 cents a share, taking the total on offer to shareholders to $1.85 per share.
Malaysian Stock Exchange-listed UEM Edgenta Bhd, which owns 61.2 percent of the company, has entered a lock-up agreement to sell into the offer, subject to shareholder approval. UEM's 69 percent owner, UEM Group Bhd, has already given an irrevocable undertaking to vote in favour of the offer, WSP said in a statement.
L'Heureux said Opus will be able to "greatly leverage WSP's customer base and strong international brand equity to significantly bolster its positioning and growth outside of New Zealand." At the same time, it would give WSP an opportunity to improve its presence and expertise in the Australia and New Zealand markets, particularly New Zealand, where Opus "has a leadership presence".
The takeover documents say Opus shares "have performed significantly worse than the NZX 50 Index" over the past two years, with its performance negatively impacted by offshore challenges." It cited Opus's 2016 earnings, which showed an earnings before interest and tax loss in Australia, Canada and theUS and a drop in ebit in the UK.
The Wellington-based company reported a loss of $29.9 million, or 20 cents per share, in calendar 2016, compared to a profit of $16.7 million, or 11 cents, a year earlier. Opus said at the time that its Australian and Canadian units were hit hard by the collapse in oil prices. The company restructured its business last year along sector lines of buildings, water and transportation instead of country-based divisions, which it said was "essential to ensure a viable future for the business."
Opus is scheduled to release its first-half results tomorrow.