Navitas Limited Announces Scheme Implementation Deed with BGH Consortium

  • Mar 25, 2019 AEDT
  • Team Kalkine
Navitas Limited Announces Scheme Implementation Deed with BGH Consortium

As per the media report, BGH Capital is now looking for overseas business opportunities after finalising approximately  $2.1 billion deal to acquire education company, Navitas Limited (ASX: NVT). Ben Gray of BGH Capital stated that Rodney Jones, Navitas' Founder, would return as Non-Executive Chairman. The firm will now look at more education business opportunities offshore.

Navitas Limited has confirmed about its Scheme Implementation Deed (“SID”) with BGH BidCo A Pty Ltd (“BGH BidCo”), an entity that will be owned by a consortium comprising of the BGH Fund (as defined in the SID), AustralianSuper, entities associated with Mr. Rodney Jones (“RMJ”) and certain limited partners of the BGH Fund, who are co-investing with the other consortium members. (“BGH Consortium”)

Following the scheme, BGH BidCo, by way of a scheme of arrangement, will acquire 100% of the share capital of Navitas. Under the scheme, provision of $5.825 in cash per Navitas share has been set for Navitas shareholders. Navitas’ equity stands at the cash consideration values of around $2.1 billion. It will include the first non-binding proposal from the BGH Consortium of $5.50 per Navitas share as announced on October 10, 2018, which is an increase of $0.325 per Navitas share to the price offered.

Being the last trading day before Navitas reported that it already has received the First Indicative Proposal. There will be a provision of 34% premium to the closing price of Navitas shares at $4.35 as on October 9, 2018. It represents a further 33% premium to the one-month VWAP up to and including October 9, 2018, of $4.37, and a 33% premium to the three months VWAP up to and including October 9, 2018, of $4.39. The enterprise value/pro forma EBITDA from continuing operations for the 12 months ending December 31, 2018, will be at a multiple of 15.5x.

The Directors of Navitas recommended all the shareholders to vote in favor of the Scheme in the meeting. It included the condition of under the absence of any superior proposal and subject to an independent skilled expert who could highlight that the Scheme is in the Navitas shareholders' best interests.

The conditions for implementation of the Scheme will include the requirement of approval of Navitas shareholders and the Federal Court of Australia. Navitas is subject to required regulatory exclusivity obligations under the scheme, which includes "no talk"-"no shop" along with notification obligations. With respect to any Superior Proposal received by Navitas, the Scheme also has a provision of matching right regime for the company. It also includes provision, under which a break fee of $15.65 million may be payable by BGH BidCo to Navitas, or a reverse break fee of $15.65 million may be payable by BGH BidCo to Navitas, depending on the circumstances.

On stock information, Navitas’ share last traded at $5.76 with the market capitalisation of ~$2.06 billion as on 25 March 2019. Its dividend yield was at 3.02%. Today, its day’s high is at $5.775 and day’s low at $5.750 with the daily volume of ~1,152,728. Its 52 weeks high was at $5.775 and 52 weeks low at $3.87 with average volume of 1,199,279. Its absolute return for five years, one year, and six months are -22.79%, 12.50%, and 31.81%, respectively.


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