PMP won't give TMA more access without proof of funding

Thursday 5th July 2012

PMP, the ASX-listed printer, said it won’t allow TMA Group further access to its books for due diligence until it sees proof that the would-be suitor could fund a takeover offer.

Shares of PMP soared in April when it disclosed a “highly conditional, non-binding indicative offer” from Sydney-based ticketing, parking equipment and packaging services firm TMA of between 68 Australian cents and 78 cents – more than three times PMP’s market value at the time.

The stock reached as high as 65 cents on April 27 from 25 cents immediately before the approach was made public and has retreated back to 33 cents since then. PMP granted TMA has so far provided “limited due diligence materials.”

“The PMP board is not satisfied that TMA has demonstrated the requisite funding capacity to warrant access to further due diligence,” chairman Ian Fraser said in a statement to the ASX. Further access won’t be granted “until such time that the requested proof of funding capacity is provided.”

PMP's share price has almost halved in the past 12 months as the printing company downgraded profit forecasts and unveiled plans to slash costs. Management “remains focused on the Australian print transformation and is currently finalising a detailed implementation plan,” Fraser said. It will provide an update with its 2012 results on Aug. 27.

The company affirmed its guidance for earnings before interest and tax, and before significant items in a range of A$30 million to A$33 million. Net debt at June 30 was A$145 million, just below its guidance of A$150 million to A$155 million.

At today’s share price, PMP has a market capitalisation of A$106.9 million.

The company also operates in New Zealand, printing magazines and advertising materials for companies such as Fairfax Media, New World supermarkets and Sky Network Television and distributing magazines through its Gordon & Gotch subsidiary.

BusinessDesk.co.nz

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