GUD to raise capital as it proceeds with Dexion takeover
GUD Holdings Limited (GUD) shares were halted ahead of the company’s announcement that a takeover offer for Dexion Limited (DEX) would be funded via a mix of existing cash reserves and bank facilities, a fully-underwritten $40 million institutional placement and a non-underwritten share purchase plan (“SPP”) for up to $15 million. GUD said under the takeover offer, it is offering Dexion shareholders 80c cash for every Dexion share, equating to an equity valuation for Dexion of $84 million.
The company said the Dexion directors unanimously recommend the offer to shareholders and all Dexion directors who own or control Dexion shares have indicated their intention to accept the offer, in the absence of a superior proposal.
GUD managing director Ian Campbell said the rationale for the transaction is compelling.
“The acquisition will provide a significant growth platform for GUD, adding an international dimension to the company as well as providing access to growth sectors in distribution and third-party logistics,” MR Campbell said.
”GUD’s managerial skills and financial resources will enable us to take full advantage of the market opportunities available to Dexion.”
He added that the enlarged GUD would be a more balanced and diversified business, with a strong presence in both commercial and consumer markets.
The company expects the transaction to be earnings per share accretive in the first full year of ownership.
GUD said it proposes to lodge its Bidder’s Statement shortly and anticipates the offer being open for acceptance early next month. The offer is expected to close in early August.
Meanwhile, the company said the Placement has been fully underwritten by J.P. Morgan Australia Limited and Macquarie Capital Advisers Limited at $8.30 per share.
GUD said the launch of the SPP is expected on July 5, with shares being offered at the lower of the Placement price of $8.30 each.
The company also announced its intention to suspend its share buyback program.
GUD said it expects full year EBIT to be at the top end of its previously announced guidance of between $64 million to $68 million.
As at 1115 AEST, GUD shares remained halted at $8.65, while Dexion shares were up 5c to 77c.
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