Michael Hill's takeover offer gets thumbs down
Independent advice reckons the rich lister's offer is below value.
Rich Lister Sir Michael Hill's play to regain control of the company that bears his name, Michael Hill International, has hit a snag with the independent advisers report concluding Sir Michael's offer is undervalued.
Sir Michael, through the Australian-registered company Durante, has offered $0.90 per share to increase his 47.63% stake to a full control with 50.1%.
Advisers Grant Samuel note the $0.90 offer was a 5.9% premium on the December 17 share price of $0.85, but give an underlying value of shares of $0.98-$1.15 per share.
Given the small slice Sir Michael seeks to acquire, Grant Samuel said "Shareholders wishing to exit are likely to be better off selling through the share market rather than accepting the offer and facing the possibility of having a proportion of their acceptances scaled back."
In sum Grant Samuel said: "There is no compelling reason to accept the Durante offer."
In a statement shortly after Grant Samuel's advice was announced, Durante said it had extended the closing date of its offer to February 28.
Durante said with acceptances to date Sir Michael was two-thirds of the way towards his target of achieving full control of the company.
Matt Nippert
Fri, 28 Jan 2011
Fri, 28 Jan 2011
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Michael Hill's takeover offer gets thumbs down
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