The Canadian Pension Fund offering a takeover big for transmission provider Macquarie Communications Infrastructure Group (MCG) has sweetened the deal for investors, offering another 50 cents per share to appease two groups of shareholders who were holding out for a better offer than $2.50 per share.
The offer has now been raised by $274 million to $1.64 billion. MCG’s share price rose above $2.90 on news of the improved offer yesterday.
MCG owns Broadcast Australia, UK based transmission company Arqiva and emergency service transmission provider Airwave.
MCG’s Independent Directors have agreed with Canada Pension Plan Investment Board
(CPPIB) that “if the Schemes are implemented, MCG will pay MCG security holders a special
capital distribution of $0.50 per stapled security. This is in addition to the $2.50 per stapled
security cash offer by CPPIB to acquire all MCG stapled securities.”
The total increased offer to MCG share holders represents a 101% premium to the closing
price prior to the original offer, and a 181% premium to the three month average trading price to the same date.
Chairman Malcolm Long says “The
Independent Directors are delighted that CPPIB has chosen to revise its offer to MCG security
holders and unanimously recommend that MCG security holders vote in its favour. We note
that the Independent Expert has reviewed the revised offer and remains of the view that the
CPPIB proposal is fair and reasonable and therefore in the best interests of security holders.”
The company will have to borrow from the Pension fund to pay the extra 50 cents in a special distribution if the shareholders vote to accept the offer. MCG says the loan is
required “due to timing differences that arise from the expected receipt of distributions from
MCG’s underlying businesses in August 2009 and the expected date of payment of the special capital distribution.”
A shareholders meeting was scheduled for this week, with recalcitrant shareholders, lead by Lazard Asset Management and Tyndall Investment Management planning to object to the offer. That meeting has been postponed and MCG has published correspondence from Tyndall saying it will now recommend to its shareholders that they accept the offer.
Because the offer is in play, shareholders will miss out on a distribution for the six
months ended 30 June 2009.
Broadcast Australia, has been awarded contracts to provide ongoing operations and maintenance of public and commercial digital radio services in Australia’s five largest capital cities. In March, the company signed a 15-year agreement with the two public broadcasters, ABC and SBS, for the provision of fully managed DAB+ services in Melbourne, Sydney, Adelaide, Perth and Brisbane. This was followed in May by operations and maintenance contracts with five joint-venture companies representing commercial radio networks in the same five metropolitan areas.
Full details of the MCG revised offer are at the link below.