Another generous unconditional off-market takeover bid, for Australian contractor Watpac this time for the whole company, global contractor BESIX Group has made. To the last closing price of 66c per share, the offer price of 92c per share is a 40.5 percent premium. The share price of Watpac (ASX: WTP) immediately shot up in morning trade to the 92c offer price.
In February this year, it made a 92c per share offer for an additional 35.95 percent stake, BESIX – which already owns 28.1 percent of Watpac. In June due to ‘the proportional nature of the scheme’ this offer was spurned by Watpac shareholders. BESIX now intends to acquire the rest of the shares it doesn’t own, to address this.
The Watpac board recommended shareholders accept the offer unanimously. After failing to secure two major projects, Watpac revealed it was considering selling its mining business, in April. The company recorded a loss before tax of $46.9m, despite revenues of over $1 billion in FY18, its fourth loss in six financial years.
BESIX offered to acquire 50% of the Watpac Shares which BESIX did not already own pursuant to a scheme of arrangement, BESIX and Watpac entered into a Scheme Implementation Agreement, on 25 February 2018. BESIX is now proposing to acquire 100% of the Watpac Shares it does not already own by way of an unconditional all-cash off-market takeover bid for the same consideration as was offered under the Scheme.
Whilst it operates largely outside of Australia the BESIX Group is a global business, Watpac presents an opportunity for a combined group to implement a service offering which is geographically diversified BESIX believes that the proposed acquisition of an increased stake and has broader operational capabilities along with enhance overall competitiveness.
BESIX is seeking to increase its ownership to obtain a controlling interest in Watpac, whilst preserving its Australian identity. BESIX intends to expand its strategic support including putting its extensive, providing Watpac with an enhanced technical and technological edge such as direct access to BESIX’s world-class engineering platform, innovative and international track record and expertise behind the Watpac brand and assisting Watpac to diversify its services offering.
The Offer price represents a premium, at the date of the announcement of the offer, of: 40.5% over the last closing price of Watpac Shares on 26 October 2018, 38.8% over the 1-month volume weighted average price (VWAP) of Watpac Shares to 26 October 2018, since the Scheme Meeting to vote on the Scheme held on 7 June 2018 of $0.71, 30.5% over the VWAP of Watpac Shares. As at 23 February 2018 37.3% over the undisturbed price and 54.7% over adjusted net tangible assets per Watpac Share of $0.59. The Offer provides a significant premium for the Watpac Shares
Watpac is trading close to it 52-week high and has seen a performance change of -9.03% over the past 12 months. However, the daily percentage change has been 40.763% as at October 29, 2018.
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