SYDNEY: Advanced Innergy Holdings Ltd (ASX:AIH) has submitted a non-binding indicative proposal to acquire Matrix Composites & Engineering Ltd (ASX:MCE) for A$0.40 per share in cash, the company said on Monday, representing a 66.7% premium to the target’s last closing price before AIH built a 19.9% stake.
The proposed acquisition, to be executed via a scheme of arrangement, values the deal at a significant premium to Matrix’s recent trading averages, with AIH describing the offer as “best and final” in the absence of a superior competing proposal for all or a material part of Matrix’s shares or assets.
AIH said the acquisition is a key part of its strategy to build a market-leading technical buoyancy and subsea ancillaries platform and establish a manufacturing presence in the Asia-Pacific region. It highlighted Matrix’s Henderson facility as an “immediately deployable” regional production base.
The indicative proposal remains subject to conditions including completion of exclusive due diligence, regulatory and government approvals, execution of transaction documentation, and final approval from AIH’s board.
In a related move, AIH’s wholly owned subsidiary, Advanced Innergy Solutions Australia Pty Ltd, has entered into call option deeds with entities linked to several significant Matrix shareholders to acquire a total of 19.9% of Matrix’s issued shares.
Each call option gives Bidco the right, but not the obligation, to acquire the optioned shares at the same A$0.40 per share price if a competing proposal is publicly announced, subject to receipt of approval from Australia’s Foreign Investment Review Board (FIRB). AIH said it had lodged an application with FIRB prior to the announcement.
The call option agreements do not restrict the option holders from voting their shares before the options are exercised. AIH said it expects to release its notice of initial substantial holding and copies of the call option deeds to the Australian Securities Exchange on March 31.
AIH is being advised by Henslow Pty Ltd and MinterEllison.