Two institutional investors have indicated they will accept a revised takeover offer for Pyne Gould Corporation prompting the company's independent directors to concede that the bidder will achieve at least 50.01% control.
Two institutional investors have indicated they will accept a revised takeover offer for Pyne Gould Corporation prompting the company’s independent directors to concede that the bidder will achieve at least 50.01% control.
However, the directors have made no definitive recommendation to shareholders on whether to sell into the offer as it may depend on individual circumstances. They have reiterated that they do not intend to sell their own shares.
Last week Australian Equity Partners, an investment vehicle of PGC shareholders George Kerr and Californian hedge fund Baker Street Capital, lifted its original 33-c-share offer for the remaining 66% of PGC it doesn’t already own by 12% to 37c-a-share.
The bid is still well short of the valuation put on the company by independent advisor Grant Samuel of between 49c and 57c-a-share but has been pitched to shareholders as cash in the hand now, instead of a long road to share price recovery without dividend payments.
In an update on the offer yesterday, PGC independent directors Bryan Mogridge and Bruce Irvine said discussions with AEP confirmed that two “institutions” have indicated to AEP their intention to accept at the revised price.
PGC did not name the investors and no substantial shareholder notices have been filed as yet.
AEP already has commitments from ACC and interests associated with Mr Kerr to sell into the offer.
The PGC directors noted that the threshold of acquiring more than 50.1% was low and if the offer was successful “the likelihood of the PGC share price declining below the offer price for a period of time is highly likely given the position of AEP and its stated strategies for PGC.”
The directors said that shareholders who did not require a dividend or liquidity at or above the current price anytime soon, should not sell.
But those who do and are unable to wait for AEP’s stated longer term plans to provide value should sell, pending their own financial advice.
Grant Samuel said in its report that the original 33c-a-share bid presented no compelling reason for shareholders to sell into the offer.
The improved offer is still 24-35% discount to Grant Samuel’s valuation range.
PGC shares closed yesterday down 1c at 35c.
