Crescent Capital Investments, already a substantial holder in Cardno Limited (ASX:CDD), has announced that the company intends to make a proportional off-market offer to acquire 1 out of every 2 shares held by Cardo shareholders, not already held by Crescent, for $3.15 per share. The offer price represents a 26 per cent premium on the 11 September closing price of $2.50.
Cardno shareholders who accept the offer will therefor receive cash consideration of $3.15 per share in respect of 50 per cent of their Cardno shares and can either retain their remaining shares or sell them on market.
Pre-offer, Crescent and its associate’s had voting power in 19.62 of Cardno shares. If 100 per cent of the non-Crescent shareholders choose to accept this proportional offer, Crescent’s ownership of Cardno shares will increase up to a maximum of approximately 59.91 per cent for a total cash consideration of approximately $215 million. This offer is fully equity funded by Crescent advised funds.
Crescent is an entity owned and controlled by Crescent Capital Partners V, a leading Australian private equity fund. Commenting on today’s offer, Crescent Capital Managing Partner, Michael Alscher, said “Our offer provides the opportunity for shareholders in Cardno to sell half of their shareholding at a significant premium to recent trading levels.
“Our offer enables shareholders to realise substantial value for part of their holding in a company that has experienced a material decline in earnings and resultant shareholder returns over the last three years, and which has an uncertain outlook.”
Cardno’s share price has declined significantly over the last 12 months. Disappointing forecasts late last year resulted in heavy selling as the company’s share price fell from $6.88 to $2.88. The last 10 months has seen the stock price move mostly sideways and following today’s takeover announcement, the company’s share price has gained over 15 per cent, currently trading at $2.89 (12.00AEST).
Author: Ben Visser
Sep 14, 2015
Ben is a Wise-owl equity analyst focusing on ASX blue-chips stocks. Ben has a Bachelor of Business in Finance majoring in property valuations and management. In his role at Wise-owl Ben conducts in-depth fundamental and technical analysis which helps him to find profitable investment opportunities on the ASX and abroad.