Sharechat Logo

Nuplex directors unanimously back $1.05 billion Allnex bid

Monday 11th April 2016

Text too small?

Nuplex Industries' independent directors are unanimously backing Allnex Belguim SA's $1.05 billion bid for the resins maker after the US-based firm completed its due diligence. 

The companies have signed a scheme implementation agreement, which values Nuplex at $5.55 a share, including the 12 cents per share dividend payment in February. That's a 44 percent premium to where the shares were trading before the Feb. 15 announcement and higher than the current price of $5.26, which gained 3.5 percent at today's open. Nuplex's directors all support the bid, which requires 75 percent approval in a special meeting likely to be held in August. 

The recommendation is contingent on the $5.43 offer price, which excludes the dividend, falling within or above the independent adviser's valuation range, and that a better offer doesn't emerge. Managing director Emery Severin abstained from making a recommendation because of his executive role. 

"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," chairman Peter Springford said in a statement. "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." 

Allnex is controlled by Boston private equity firm Advent International, whose early advances to buy Nuplex were rejected. Those talks continued and Nuplex relented when the price became attractive, agreeing to a merger which will create one of the world’s largest makers of coating resins. 

Nuplex started in Auckland in 1952 as a flooring distributor before branching out into resins and polymers over the next 20 years. 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. 

The deal, which will remove the high-tech manufacturing firm from the NZX's list of top 50 stocks, has to be completed by Nov. 9 and requires regulatory approvals in New Zealand, Australia and China. Those are expected by the end of July. Once that's completed, the transaction will need High Court sign-off. 

Both parties face a break fee of $10.47 million if the deal is terminated outside agreed terms.

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

NZ dollar falls with Aussie after Westpac's RBA rate cut call
Intuit juggernaut grows QuickBooks subscribers but momentum slows
Reaction to Budget rules relaxation shows balance 'about right', says Ardern
Augusta lifts net profit six fold as investors flock into new funds
Annual exports to China top $15 billion for first time
Gentrack posts $8.7M loss on CA Plus write-down
Westpac says RBNZ capital proposals would add $6,000 p.a. to an Auckland mortgage
Cavalier says market conditions still challenging
Ryman hikes dividend as annual earnings grow on wider development margin
24th May 2019 Morning Report

IRG See IRG research reports