HRL Holdings (ASX:HRL) shares gain on takeover offer from ALS (ASX:ALQ)

June 29, 2022 08:40 PM PDT | By Bhawna Gupta

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HRL Holdings (ASX:HRL) shares gain on takeover offer from ALS (ASX:ALQ) — Image source: © Wrangler | Megapixl.com

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Highlights

ALS has inked a bid implementation deed to buy all the ordinary shares of HRL.

The offer gives HRL shareholders the chance to sell their shares at a price that is higher than their most recent trading performance.

ALS will make the payment through its cash reserves and existing debt capacity.

ALS Limited (ASX:ALQ) today (June 30) announced that it has signed a bid implementation deed with HRL Holdings Limited (ASX:HRL). Under the deed, ALS will be buying all of the ordinary shares of HRL that it does not already hold. This will be done through an off-market takeover at AU$0.16 cash per share.

The HRL Directors, who collectively hold or control 18.59% of the HRL shares in issue, have stated that they would accept the offer for the HRL shares they own or control as there is no better option available.

The offer is anticipated to become available by early July. It will be open for acceptance for at least six weeks (the "offer period"), with the option to extend the offer period as needed.

A contract protection regime containing no shop and no talk rights, the right to match any better bids, and the payment of an agreed break fee of AU$800,000 by HRL to ALS in certain situations has been agreed to by ALS and HRL.

ALS will make the payment through its cash reserves and existing debt capacity.

Meanwhile, shares of ALS and HRL were trading at AU$10.84 each (down 0.51%) and AU$0.16 apiece (up 5%) respectively on ASX at 12.05 PM AEST.

According to a second announcement, two of HRL's long-term institutional owners have sold ALS a relevant stake in 19.9% of the company's shares.

Highlights of the offer

The offer consideration of AU$0.16 per HRL share provides shareholders with an attractive premium of:

Data Source- Company announcement dated 30 June 2022

Benefits of the deal for ALS

To increase its market share and competitiveness in New Zealand and Australia for life sciences services, ALS views the proposed purchase of HRL as an exciting opportunity.

Data Source- Company announcement dated 30 June 2022

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