Perth-based metallurgical testing specialist Ammtec has agreed to a conditional takeover after Campbell Brothers made a revised increased offer for the company.
Perth-based metallurgical testing specialist Ammtec has agreed to a conditional takeover after Campbell Brothers made a revised increased offer for the company.
Campbell Brothers increased its offer to $3.85 per Ammtec share from $3.80.
Ammtec had rejected the takeover offer at $3.80.
In a joint statement to the Australian Securities Exchange the companies said Campbell Brothers will consent to Ammtec paying an 11 cent fully franked dividend for the 2010 financial year and a conditional 10 cent special dividend.
This values Ammtec's shares at $4.06, representing a 62 per cent premium to Ammtec's closing price of $2.51 on May 18 when Campbell Brothers made its first offer.
The dividend had been an issue of contention between the two companies.
In June, Campbell Brothers said the minerals testing company's decision to raise its final dividend from the previous year contravened the conditions of its offer for Ammtec.
The takeover is subject to Campbell Brothers not reaching a 30 per cent relevant interest in Ammtec Shares by September 15.
As at September 10, Campbell Brothers had a relevant interest of 14.62 per cent in Ammtec, the single largest stake in the company.
Ammtec chairman David Macoboy said the Ammtec Board believes the Campbell Brothers Revised Offer, including the FY2010 dividend and the special dividend, represents fair value for the Company and is in the best interest of all Ammtec shareholders.
"The board unanimously recommends Ammtec shareholders accept the Revised Offer after September 15, in the absence of a superior proposal," he said.
"Each Ammtec director will accept the Revised Offer in respect of the shares they own control, in the absence of a superior proposal."
Campbell Brother managing director Greg Kilmister said, "We are pleased with the Ammtec Board's decision to recommend our Revised offer."
"We believe the acquisition offers the opportunity to roll-out Ammtec's metallurgical testing capability throughout Campbell Brothers' established global network and look forward to working with Ammtec and leveraging the combined expertise of both companies to pursue new business initiatives."
Subject to Campbell Brothers Limited ("Campbell Brothers") not reaching a 30% relevant interest in Ammtec shares by 15 September 2010, Campbell Brothers, its wholly owned subsidiary, Australian Laboratory Services Pty Ltd ("ALS"), and Ammtec Limited ("Ammtec") have agreed a Revised Offer.
The Ammtec Board unanimously recommends that Ammtec shareholders accept the Revised Offer after 15 September 2010, in the absence of a superior offer.
Under the Revised Offer, Ammtec shareholders will receive $3.85 cash for each Ammtec share or, alternatively, 4 Campbell Brothers shares for every 33 Ammtec shares.
Under the Revised Offer:
- The Ammtec Board will bring forward the record date for the 11 cents per share fully franked FY2010 final dividend to 24 September 2010. This FY2010 final dividend will be paid on 29 October 2010; and
- Ammtec will pay a special dividend of 10 cents per share, also with a record date of 24 September 2010. The dividend will be franked to the extent possible. This special dividend will only be paid if the Revised Offer becomes unconditional.
Under the Revised Offer, Campbell Brothers will not object to the payment of the revised FY2010 final dividend previously announced by the Ammtec Board or the payment of the special dividend.
Ammtec Chairman David Macoboy said the Ammtec Board believes the Campbell Brothers Revised Offer, including the FY2010 final dividend and the special dividend, represents fair value for the Company and is in the best interests of all Ammtec shareholders.
"The board unanimously recommends Ammtec shareholders accept the Revised Offer after 15 September 2010, in the absence of a superior proposal," said Mr Macoboy.
"Each Ammtec director will accept the Revised Offer in respect of the shares they own or control, in the absence of a superior proposal."
Following recent completion of limited due diligence on Ammtec's FY2011 forecasts, Campbell Brothers announce that it will extend the offer period by 3 weeks so that it is scheduled to close on 13 October 2010. If Campbell Brothers does not achieve a 30% relevant interest in Ammtec's shares by 15 September 2010, Campbell Brothers will:
1. Increase the consideration under the cash offer by 5 cents to $3.85 per Ammtec share;
2. Declare the consideration in respect of the Revised Offer final, in the absence of a superior
proposal;
3. Declare the Revised Offer unconditional in all respects upon achieving a relevant interest of 90% in Ammtec. Campbell Brothers retains the right to declare the Revised Offer unconditional at lower relevant interest levels if it so chooses but will not declare the Revised Offer unconditional prior to 24 September 2010, other than in the event of a competing proposal, in which case it will undertake not to register any transfers in respect of the shares of accepting Ammtec shareholders until after 24 September 2010;
4. Where the Revised Offer becomes unconditional, accelerate payment of the consideration payable under the cash offer and the alternative share offer to 5 business days after the later of receipt of acceptance and the Revised Offer becoming unconditional (except in the case where the acceleration would lead to transfers being registered prior to 24 September 2010); and
5. Waive its rights under the Bidder's Statement to reduce the amount of the consideration due to Ammtec shareholders by an amount equivalent to the FY2010 final dividend. Once the Revised Offer is unconditional, it will also waive its rights to reduce the consideration by an amount equivalent to the special dividend.
Under the Revised Offer, Ammtec has also given a commitment to Campbell Brothers to deal exclusively with it in the absence of a superior offer, to notify Campbell Brothers of any competing proposals and to provide Campbell Brothers the right to match in the event of an alternative offer being made. The terms of this agreement are included as an annexure to this announcement.
As at 10 September 2010, Campbell Brothers had a relevant interest of 14.62% in Ammtec, the largest single interest in Ammtec shares.
Campbell Brothers strongly believes that the Revised Offer represents significant value for Ammtec shareholders given:
- The increased cash offer value of $4.06 per Ammtec share - including the final and special dividends - represents a 62% premium to Ammtec's closing price of $2.51 on 18 May 2010, the last trading day prior to announcement of ALS' intention to make an offer for Ammtec;
- The alternative share offer of 4 Campbell Brothers shares for every 33 Ammtec shares implies a value of $3.87 per Ammtec share based on the 2 day VWAP for Campbell Brothers shares up to, and including, 10 September 2010. Including the final and special dividends, the total implied value to Ammtec shareholders is $4.08 per share or a 63% premium; and
- In both cases, eligible Ammtec shareholders may also benefit from up to 9 cents in franking credits attached to the FY2010 final dividend and the special dividend. For those that can take advantage of these potential franking credits, the Revised Offer may equate to potential value of up to $4.15 under the cash offer and $4.17 under the alternative share offer.
Campbell Brothers Managing Director, Greg Kilmister, said: "We are very pleased with the Ammtec Board's decision to recommend our Revised Offer. We
believe the acquisition offers the opportunity to roll-out Ammtec's metallurgical testing capability throughout Campbell Brothers' established global network and look forward to working with Ammtec and leveraging the combined expertise of both companies to pursue new business initiatives.
Ammtec shareholders who choose to receive Campbell Brothers shares by accepting the share offer will have the opportunity to participate in these combined strategic benefits as well as our other Campbell Brothers growth objectives."
