Mining equipment and rolling rock supplier Bradken Limited (ASX:BKN) received an unsolicited takeover bid from Pacific Equity Partners (PEP) and Koch Industries on Wednesday night. Although the price tag for the bid came in at a 30 per cent premium relative to the share price, the company rejected the non-binding $2.50 per share proposal after the board said the proposal did not “represent fair value”. The bid for the company was around half of a similar offer made by PEP and Bain Capital last December when the share price was approaching $4.80 per share. The proposal was withdrawn the next month after the share price of Bradken followed a downward trend, falling more than 50 per cent in the following months.
Following the news of the takeover bid, the share price of BKN has soared. It has risen 25c, or 12.89 per cent, at $2.19 per share around 2:25pm on Thursday. Despite the rally today, BKN has fallen 47.36 per cent in the last 12 months and 53.70 per cent so far this year. In February, the company reported a half-year net loss of around $93m as it continued to struggle amid a downturn in the mining industry. The board members of Bradken said the proposal was “subject to a number of conditions including certain financial due diligence.” However, the board came to a quick decision and ultimately decided against the takeover bid. “The board of Bradken considered the proposal and determined that it does not represent fair value and accordingly determined not to engage further.”
Author: Matthew Dibb
Apr 02, 2015
Matthew has an extensive track record in equity markets and derivative advisory. Spanning a career in several investment banks and prviate wealth groups including Macquarie Bank, his specialist knowledge relates to capital market advisory and equity market analytics. Matthew has a diploma in Financial Advisory, Applied Finance and is ADA 1 & 2 accredited.