The Supreme Court of Victoria, on Friday, 7 December 2018, has approved the scheme of arrangement to effect the proposed acquisition of all the shares on issue in Scottish Pacific Group Ltd by SME Capital Investments III Pty Ltd (an entity wholly owned by funds managed or advised by Affinity Equity Partners Limited).
Scottish Pacific Group Ltd (ASX: SCO), based in Australia & New Zealand, is a financial service provider of working capital solutions including debtor finance and trade finance facilities. SME Capital provides institutional capital access to UK bases SMEs.
Scottish Pacific shareholders who hold shares as on Wednesday, 12 December 2018, 5:00 pm (Record date) will be entitled to receive the Scheme consideration. The Scheme consideration will be paid to Scheme Participants on Tuesday, 18 December 2018 (implementation date). Scottish Pacific has applied to ASX to suspend quotation and trading of its shares effective from close of trading on ASX today.
Scottish Pacific has 139,191,901 shares and 4,243,619 options outstanding with the market cap of $612.44 m, trading at $4.40 as on 7 December 2018.
Recently, the company paid a dividend of 10 cents on 19 September 2018. On 24 September 2018, SCO announced that SME Capital Investments III Pty Ltd would acquire 100% share capital by the way of Scheme Consideration.
Under the terms of the Scheme, SCO shareholders will receive $4.40 per share in cash representing a premium of 27.8% to 1-month volume weighted average price to 19th September 2018 of $3.44.
The SCOs’ management had an option to make an election to receive either the Scheme Consideration, or in respect of 50% of SCO shares they hold, 1 share in SME Capital Investments and a cash payment of $4.40 in respect of the balance shares. The Scheme Consideration of $4.40 per share implies a fully diluted market capitalisation for SCO of approximately $630 m representing 17.6% premium to the SCO’s closing share price on 19 September 2018 or 18.7x price to FY18 NPATA on a fully diluted basis.
On 26th October 2018, SCO registered the Scheme Booklet in relation to the proposed acquisition of all the shares of Scottish Pacific by SME Capital Investments, followed by the orders issued by the Court. The scheme was subject to the SCO’s shareholders at the Scheme Meetings and the Court as well as certain other conditions. The scheme was cross verified, approved as fair and reasonable by the Independent Expert, KPMG Corporate Finance, appointed by the board of directors of Scottish Pacific.
On 20 September 2018, the securities of SCO were placed in a trading halt until 24 September 2018 based on an announcement pending to be released. On 24 September 2018, the scrip opened at a price of $4.30 with a 15% increase as compared to previous close of $3.74 considering the impact of acquisition news. Post that the scrip has been trading between $4.30 to $4.40 till date.
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