Reluctant takeover target Nuplex has entered a scheme implementation agreement with Allnex Belgium SA to accept its $1.05 billion bid for the global resin manufacturer.
Nuplex's independent directors have unanimously backed the Allnex bid after the US-based company completed due diligence.
The mid-February bid for Nuplex sale was an ‘‘indicative, non-binding and conditional proposal'', but Nuplex gave Allnex six weeks of ‘‘exclusivity'' for the agreement to be pulled together under due diligence.
Nuplex's board had initially rejected advances by Allnex, which is owned by private equity company Advent International, but after three offer revisions getting to $5.55 per share, Nuplex agreed to further talks and going public with the offer.
An Allnex and Nuplex merger would create one of the world's largest makers of coating resins.
Nuplex appears set to join the separate Diligent takeover where both companies would be delisted, and absorbed into the separate multibillion-dollar US private equity fund companies Insight Venture Partners, for Diligent, and Advent International, for Nuplex.
Nuplex shares were up 17c to $5.25 following the announcement.
Allnex's offer is $5.55 per share - $5.43 per share plus the 12c interim dividend - which is a 44% premium to Nuplex's $3.86 closing price on February 12, the last trading day before the Allnex proposal.
Forsyth Barr broker Damian Foster said the next step was for the scheme proposal to be sent to Nuplex shareholders.
He said the proposal required at least 75% of the cast votes to be in favour of the scheme, plus the votes cast must represent more than 50% of the total voting rights of the company.
‘‘This announcement confirms our previous views that we did not expect any issues to arise through due diligence, and that the Nuplex board will support the $5.43 offer price,'' Mr Foster said.
Nuplex chairman Peter Springford said the independent directors considered all aspects of the proposed scheme and concluded it provided some certainty over the future value of the shares and at a premium, pre-proposal.
‘‘The board believes Nuplex is well-positioned to deliver growth in earnings, particularly from the platform now established in Asia and our new breakthrough technology, Acure.
‘‘However, delivering this growth will take some time and therefore shareholders may find attractive the opportunity to realise some of the future value of their Nuplex shares in cash now,'' Mr Springford said in a statement.
He noted regulatory approvals were required in a number of jurisdictions.
Both parties face a $10.4 million break fee if the deal is terminated outside agreed terms, BusinessDesk reported.
The deal has to be completed by November 9, removing the high-tech manufacturing company from the NZX's list of top 50 stocks.
It requires regulatory approvals in New Zealand, Australia and China, which are expected by the end of July, then a High Court order is required for completion.
Nuplex started in Auckland in 1952 as a flooring distributor before branching out into resins and polymers during the next 20 years, BusinessDesk reported.
As the firm's focus became increasingly international, it shifted its headquarters to Sydney, while maintaining its New Zealand domicile and main listing on the NZX, which it joined in 1967.
● Since 1984, Advent has raised about $US40 billion in capital and completed more than 310 transactions, including more than 30 investments in the chemical-related industry.
Takeover to do list
•Regulatory approvals: early June.
•First Court date: early July.
•Meeting notice, send scheme details: mid July.
•Special meeting vote on offer: early August.
•Second Court date: late August.
•Implementation and payment date: late August.
•Completion deadline: Nov 9.
SOURCE: FORSYTH BARR
