Australian private equity firm Adamantem Capital, through Greenland BidCo Pty. Ltd., made an all-cash offer to acquire the entire stake of Australian electrical and power consumables distributor Legend Corp. Ltd. for 36.5 Australian cents per share via a scheme of arrangement.
The price consideration reflects an enterprise value of A$100.6 million, and represents a premium of 17.7% to Legend's closing stock price on May 22; a premium of 22.1% to the company's one-month volume-weighted average price; and a premium of 19.8% to its three-month volume-weighted average price.
Under the terms of the deal, the price may be reduced should Legend opt to declare and pay a fully franked special dividend of up to 7 cents per share before the scheme is implemented. Moreover, the special dividend would have up to approximately 3.0 cents per share in franking credits attached if it is declared and paid.
The company's directors unanimously recommend shareholders vote in favor of the scheme. Each of the directors, representing 30.83% of the share capital, intends to vote in favor of the scheme.
The buyer has already secured committed financing and was granted deal protections under the agreement, including no-shop, no-talk and no-due diligence provisions. If the scheme is not implemented under certain conditions, Legend and BidCo will pay the other a break fee of approximately A$1.0 million.
The scheme is subject to the Foreign Investment Review Board's approval, among other conditions. The deal will be up for consideration by Legend shareholders at a meeting scheduled for August, with the implementation slated in late August or in the second half. Legend will cease trading on the ASX upon deal closing.
Gresham Advisory Partners Ltd. is the financial adviser to Legend, while MinterEllison is legal adviser to the company. Luminis Partners and Gilbert + Tobin are the advisers to Adamantem.