Wireless network operator BigAir reveals takeover offer for Clever
Australian wireless broadband services provider BigAir Group Ltd (ASX: BGL) says it intends to make an off-market takeover bid for rival Clever Communications Australia Ltd (ASX: CVA).
The Board of Clever has confirmed that they will unanimously recommend BigAir's bid, subject to no superior proposal being made and subject to reviewing and being satisfied with the bidder's statement.
BigAir Chairman, Paul Tyler, said of the Clever transaction, "The merger of two of the largest dedicated fixed wireless network operators in Australia is expected to create significant cost, revenue and capital expenditure synergies. The customers of both companies will benefit from the expanded network coverage and also the combined engineering and commercial strengths of the two organisations. This deal is part of our ongoing commitment to providing business broadband users with a compelling alternative to fixed line networks."
"From a financial perspective, the contribution of Clever to total BigAir Group Revenues is expected to be significant. Once the takeover is completed, we expect that following a short period of integration it will deliver a significant increase in EPS. We also expect earnings to improve further in subsequent years, following completion of the full network integration that will be undertaken and also once new sales and marketing initiatives start to leverage the expanded network footprint and service offerings. Furthermore, the merged group will be in an excellent position to drive further industry consolidation."
BigAir proposes to make an off-market takeover bid to acquire all of the shares in Clever that BigAir does not already own, at an offer price of 0.35 BigAir shares plus 1.82 cents cash for each Clever share.
The bid represents a substantial premium over the recent market price of Clever shares. The bid values each Clever share at approximately 8.3 cents based on the VWAP of BigAir shares during the 30 trading days up to and including 19 November 2010.
The offer represents a premium of 25 per cent based on the closing price of BigAir shares on 18 November 2010, being the last date that BigAir traded, and 6.8 cents, being the closing price of Clever shares on 19 November 2010, being the last date that Clever shares traded; a premium of 18 per cent to the VWAP of Clever shares during the 30 days up to and including 19 November 2010, based on the VWAP of BigAir shares during the same period; and a premium of 27 per cent to the VWAP of Clever shares during the 60 days up to and including 19 November 2010, based on the VWAP of BigAir shares during the same period.
The cash component will be reduced to the same extent that Clever pays any shareholder distributions between now and the close of the offer.