Leading global education provider, Navitas Limited (ASX: NVT) made an announcement on 15 January 2019 stating that it has received a non-binding proposal from the BGH Consortium for an all-cash offer to acquire all the shares in Navitas at $5.825 per share through a Scheme of Arrangement. Following this news, the share price of Navitas Limited uplifted by 13.265% as on 15 January 2019.
Earlier on 15 October 2018, BGH Consortium had offered $5.50 cash per Navitas share which was a 26 percent premium to the closing share price on 9 October 2018.
The revised proposal of $5.825 per share is representing an increase of $0.325 per Navitas Share. The revised proposal is also offering a premium of 34% to the Navitas share price on 9 October 2018, and BGH Consortium has indicated that this revised proposal is the best and final offer from BGH Consortium in the absence of Navitas receiving a superior offer.
At the time of the initial proposal, the BGH had entered into Co-operation and Process Agreement in which there were restrictions on Mr. Rod Jones and AustralianSuper to accept and vote in favor of the BGH proposal. Further, there were restrictions on Mr. Rod Jones and AustralianSuper not to support any Competing Proposal and to vote against any Competing Proposal.
However, under the revised proposal, the BGH Consortium has agreed to amend its Co-operation and Process Agreement such that restrictions on AustralianSuper and Mr. Rod Jones no longer apply in the event that Navitas receives a Superior Proposal.
Navitas and the BGH Consortium have executed a Process, and Confidentiality Deed under which BGH Consortium will undertake due diligence and the parties will work towards agreeing and executing a binding scheme implementation deed on terms consistent with the Revised Proposal and documents the amendment to the Co-operation and Process Agreement. Process and Confidentiality Deed will make sure that BGH Consortium provides appropriate confidentiality obligations to Navitas.
The period of exclusive due diligence will start on 15 January 2019, and it will run until no later than 18 February 2019, and during the due diligence process, Navitas has agreed not to grant due diligence to the proponent of any Superior Proposal which has been successfully matched by the BGH Consortium.
As per the announcement, Navitas Board intends to unanimously recommend this revised proposal to its shareholders subject to various conditions which include-
- the parties are entering into a binding scheme implementation deed on terms consistent with the Revised Proposal following completion of the BGH Consortium's due diligence investigations and otherwise during the period contemplated by the Process and Confidentiality Deed.
- In the absence of a Superior Proposal.
- the revised proposal is subject to an independent expert concluding that the Proposal is in the best interests of Navitas shareholders.
After the expiry of the Exclusivity Period on 18 February 2019 and until at least 5 March 2019, the Navitas Directors would maintain their intention to recommend the Revised Proposal provided that nothing happens before or after 18 February 2019 which causes, or would have caused, the relevant exclusivity arrangements to terminate.
Meanwhile, in the last six months, the share price of the company increased by 16.11% as on 14 January 2019. NVT’s shares traded at $5.550 with a market capitalization of circa $1.76bn as on 15 January 2019 (AEST 1:55 PM).