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Australia's Thorn Group rejects A$82M offer for business finance division

Thorn Group Ltd. will not proceed with a sale of its business finance division to Consolidated Operations Group Ltd. but said it was open to further discussing the latter's A$82 million cash offer for the division, according to a Sept. 18 release.

As part of a strategic review, Thorn Group's board decided that the company's proposed A$38.7 million rights issue was a better option than Consolidated Operations Group's offer to stabilize its operations and provide the certainty and timing of cash flows required to settle a class action. The company will pay A$25 million under the settlement agreement, which is subject to court's approval.

Thorn Group said it was open to continuing talks with Consolidated Operations Group to understand its proposal, noting that the headline offer price of A$82 million is subject to adjustments, some of which are likely to be material. As such, the company's board is not able to confirm the offer's net financial impact to Thorn Group should it decide to accept the offer.

The company's fully-underwritten non-renounceable 1-for-1 rights issue comprises institutional and retail components. The offer was priced at 24 Australian cents per share. The retail entitlement offer will open Sept. 23 and close Oct. 2, the company said. The A$15.4 million institutional component was fully subscribed and completed, with shares to be settled on Sept. 24.

Separately, Consolidated Operations Group confirmed it offered to acquire Thorn Group's equipment finance business, excluding its Radio Rentals consumer leasing business. It added that it remains open to further discussions with Thorn Group.