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Scottish Pacific has announced that it has entered into a binding Scheme Implementation Agreement (SIA) with SME Capital Investments (a subsidiary of private equity firm Affinity Equity Partners) under which it is proposed that the bidder will acquire 100 per cent of the share capital of Scottish Pacific, which it has valued at approximately $630 million.
Under the terms of the scheme, Scottish Pacific’s shareholders will be entitled to receive $4.40 per share in cash, subject to all applicable conditions being satisfied or waived and the scheme being implemented.
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; and
- 7 times price to full-year 2018 (FY18) net profit after tax and amortisation (NPTA) on a fully diluted basis.
Scottish Pacific’s directors have recommended that shareholders unanimously vote in favour of the scheme, subject to no superior proposal emerging and the independent expert concluding that the scheme is in the best interests of shareholders.
Scottish Pacific’s 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.”
The lender has noted that a scheme booklet containing detailed information of the scheme proposal, including an independent expert report, is expected to be issued to Scottish Pacific’s shareholders by early November 2018.
The debtor financier added that shareholders will be given the opportunity to vote on the scheme at a meeting that is expected to be held on 30 November 2018.
Further, subject to shareholder approval and the other conditions of the scheme being satisfied, the lender expects the scheme to be implemented in late December 2018.
Customary conditions which must be satisfied before the scheme is implemented include:
- any ASIC or ASX reliefs, waivers, confirmations, exemptions, consents or approvals;
- approval of any relevant regulatory authority;
- no court or regulatory authority take steps to restrain or prevent the scheme;
- the independent expert issuing a report which concludes that the scheme is in the best interest of scheme participants;
- no enforcement action initiated by any regulatory authority; and
- obtaining consents to the change of control from each relevant counter party to Scottish Pacific’s warehouse facilities.