Shareholders agree to lender acquisition

Shareholders of debtor financier Scottish Pacific have voted in favour of a takeover bid from SME Capital Investments (a subsidiary of private equity firm Affinity Equity Partners). 

Scottish Pacific has now applied to the Supreme Court of Victoria for orders approving the scheme at the second court hearing, which is scheduled for Friday, 7 December.

It is expected that a further announcement will be made after the court has considered Scottish Pacific’s application.

Should the court approve the deal, and the orders are lodged with ASIC on the same day, the takeover would become legally effective from 7 December.

Background

In September, Scottish Pacific announced that it had entered into a binding Scheme Implementation Agreement (SIA) with SME Capital Investments, under which it was proposed that the bidder would acquire 100 per cent of the share capital of Scottish Pacific, which was valued at approximately $630 million.

Under the terms of the scheme, Scottish Pacific’s shareholders are entitled to receive $4.40 per share in cash.

The scheme consideration of $4.40 per share represents:

• 6 per cent premium to SCO’s closing share price of $3.74 on 19 September 2018, being the last closing price prior to entering into trading halt and announcing the SIA
• 8 per cent premium to the one‐week volume-weighted average price (VWAP) of $3.55 (up to and including 19 September)
• 8 per cent premium to the one‐month VWAP of $3.44 (up to and including 19 September)
• 4 per cent premium to the three‐month VWAP of $3.27 (up to and including 19 September)
• 5 per cent premium to the 12‐month VWAP of $3.20
• 7 times price to full-year 2018 (FY18) net profit after tax and amortisation (NPTA) on a fully diluted basis

Scottish Pacific’s directors recommended that shareholders vote in favour of the scheme, which they have now done.

At the time of the announcement, Scottish Pacific chairman Patrick Elliott commented: “Affinity Equity Partners’ proposal represents a significant premium to [Scottish Pacific’s] recent share price and entitles all [Scottish Pacific] shareholders to receive up to 100 per cent of the scheme consideration in cash, which provides value certainty for shareholders.

“We believe the proposal is consistent with the board’s efforts to maximise shareholder value.”

[Related: Lender confirms $630m takeover bid]