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Mareterram Ltd (ASX:MTM) witnessed a stock price surge of over 17% on February 05, 2019, as the group announced for entering into a binding bid Implementation agreement (BIA) with Sea Harvest Group Ltd. Sea Harvest is one of the largest shareholders in Mareterram with a voting power of 56.28% through its wholly-owned subsidiary, Sea Harvest International Proprietary Limited. Sea Harvest proposes to acquire all the fully paid ordinary shares in Mareterram not currently owned or controlled by Sea Harvest by way of an off-market takeover offer; and for this, an offer of $0.25 cash per Mareterram share in a condition (among other things) to achieve 90% shareholding has been indicated.
The cash offer of $0.25 per Mareterram share values the entire issued market capital of Mareterram at approx. $38.6 million and the acquisition cost for the offer at $16.9 million have been indicated to enhance the 56.28% holdings of Sea Harvest in Mareterram. The funding for the proposed takeover will be done through the existing cash resources of Sea Harvest.
The Securities of Mareterram Ltd was placed on a trading halt at the request of MTM on 4th February earlier to the announcement. The proposed offer price of $0.25 cash per share represents a 22% premium to the last traded price of Mareterram Shares on Australian Securities Exchange (ASX) on February 1, 2019 of $0.205 which was the last trading day for the MTM securities prior to the announcement of the offer. Also, the shares of MTM at $0.25 cash per share are at 31% premium to the 30-day volume weighted average price (VWAP).
The proposed takeover is providing an attractive premium to the present Shareholders with the ability to lock in a guaranteed cash return.
The Board of directors established an independent Board Committee providing the scope of authority to, among other things, review, consider and evaluate the terms of the offer.
After considering the offer, each member of the independent board committee together with managing director James Clement (Non- Affiliated Director (not affiliated with Sea Harvest)) have shown their consent that the offer is in the best interest for the current shareholders of Mareterram Ltd. The independent board committee along with Mr Clement has unanimously advised the shareholders to accept the offer and has concluded that the offer is fair and reasonable seeing the premium of the $0.25 cash per share offered and the absence of any superior proposal.
Shareholder and Directors’ Plans:
The current plan over 19% interest of shareholders is based on acceptance of the offer excluding the directors not affiliated with Sea Harvest (subjective to change at later stages). The Non-Affiliated Directors intend to accept the offer (in absence of a better proposal), and their interest represents 1.7% of shares.
What's Next?
Mareterram shareholders will now receive required documentation from Sea Harvest which is known as the Bidder's statement, and Sea Harvest will receive Target's statement from Mareterram Ltd. Both the statements are expected to be dispatched on February 28, 2019.
The Bidder statement will disclose the full offer, and the Target's statement will include the Non-Affiliated Director's recommendation.
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