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Highlights
- Laboratory testing giant, ALS Limited, had sent an acquisition proposal to HRL Holdings on 30 May 2022.
- A process deed was entered between ALS and HRL on 7 June, said HRL.
- Shares of ALS dropped by over 2% after the acquisition news.
Australian laboratory giant, ALS Limited (ASX:ALQ), on Tuesday, confirmed that it had submitted a non-binding proposal to acquire its ASX-listed competitor HRL Holdings (ASX:HRL), on 30 May 2022. As per the ASX-announcement, the proposal was sent confidentially.
ALS is an AU$5.45 billion market cap commercial and professional services company, and HRL is an AU$40.53 million market cap company, dealing in the same industry.
Details of the acquisition proposal
ALS proposed to acquire HRL for AU$0.16 cash per share. The proposal was subject to many conditions, such as satisfactory execution of due diligence.
The companies inked a process deed on 7 June. Under the process deed, ALS was allowed to conduct due diligence and negotiation, informed HRL.
According to the HRL's ASX release, it has agreed to certain exclusivity, due diligence, break-free provisions and notification.
Reportedly, HRL said in a statement that both parties are in the preliminary discussion stage. In relation to any transaction, parties have not reached any agreement.
Highbury Partnership and backer & McKenzie are advising on the proposed transaction. McCullough Robertson is the legal adviser of HRL.
Image source: © Artas101 | Megapixl.com
Share performance of ALS
ALS shares dropped 2.395% to trade at AU$11.00 per share at 3:12 PM AEST on 28 June 2022. Including today’s fall, the shares sank by 13.38% in last month, and the year-to-date fall is 17.96%.
Meanwhile, the benchmark index, ASX200 Industrials (XNJ) was down 0.094% to 6,350.100 around the same time. ASX200 was buzzing in the green territory since morning. At 3:03 PM AEST, it was up 0.64% to 6,749.20.
Share performance of HRL
Shares of HRL skyrocketed more than 70% and were quoted at AU$0.135 per share, up 64% at 3:03 PM AEST. Including today’s gain, the share price increased by nearly 50% in a month and 22% in last six months. On a year-to-date basis, the price rose by 12.50%.
