GUD offers $83 million to takeover Dexion
GUD Holdings Ltd offered up to $83.8 million to takeover Dexion Ltd in bid to diversify the company's portfolio even as Dexion hinted on Monday that its board of directors are ready to accept the proposal.
The two companies revealed the possible deal on May 21, with the due diligence process on Friday last week.
Dexion priced its stocks at 80 cents per share following its jump to 72 cents on the last day of trading last week, coming from its 40 cents value right before the takeover announcement.
GUD entered a trading halt on Monday to conduct a $40 million institutional share placement for additional funding on the bid as the company stated that the takeover proposal would also be supported by a mix of current cash reserves and bank facilities and a non-underwritten share purchase plan that should raise another $15 million.
GUD managing director Ian Campbell said that the takeover would provide global dimension to the company and access to growth sectors in distribution and third party logistics.
Mr Campbell said that company shareholders could look forward for a bigger GUD with "a more balanced and diversified business, with a strong presence in both commercial and consumer markets," as he added that "we expect the transaction to be earnings per share accretive in the first full year of ownership (FY12)."
GUD is happy that Dexion's institutional shareholders, which comprise up to 16.2 percent of total shares, have also expressed inclinations to accept the offer as the company noted that at least 90 percent is required for minimum acceptance.
On the other hand, Dexion said that a bidder's statement would be filed with the Australian Stock Exchange (ASX) by the latter part of June 2010 and despatched to shareholders by early July, expecting too to despatch its target's statement on the same period.
GUD shares closed on Friday at $8.65 while Dexion shares closed at 72 cents.