St Laurence Ups Price To $1.60
St Laurence Ups Price To $1.60; Urges Rural Equities Shareholders To Vote Against H&G Offer
St Laurence Equities Limited today increased the price it will pay for up to 19.9% of the shares in Rural Equities Limited (REL) from $1.50 to $1.60 per share.
“Increasing our price by ten cents per share reaffirms our long-term commitment to building a substantial stake in Rural Equities and acknowledges the underlying value we see in the company,” St Laurence Managing Director Kevin Podmore said.
Competing bidder H&G Limited is currently conducting a partial takeover offer for Rural Equities and last Friday raised its offer price from $1.25 to $1.50 per share to match St Laurence’s price.
“At $1.60 per share, St Laurence's price is once again significantly higher than the competing H&G partial takeover offer price,” Mr Podmore said.
“Furthermore, unlike the H&G offer, it is not conditional upon gaining shareholder approval and therefore provides shareholders with certainty”.
Mr Podmore noted that H&G yesterday said that they had received acceptances to date in excess of the required amount of shares needed to reach 50.1%.
“This means that any REL shareholder who accepts H&G’s offer will have a portion of their shares scaled back and therefore will still be left with a residual shareholding. This is because H&G’s takeover offer is limited to accepting exactly 50.1% in order for it to secure a controlling stake in the company. “However, St Laurence will accept all shares offered by REL shareholders up to and until we reach the 19.9% threshold. All share offers are processed within three days with shareholders paid $1.60 per share immediately thereafter with no brokerage payable.
Mr Podmore said that given the level of acceptances St Laurence had received to date, there is still uncertainty that H&G will be able to finalise their offer because of the condition attached to it.
“We have to date secured close to 10% of the shares in REL. We thank the shareholders who have sold their shares to us to date and note they will now also receive an extra ten cents per share pursuant to our escalation clause.
“The current level of our shareholding puts St Laurence in a very strong position. The H&G offer is conditional on a majority of shareholders (excluding H&G and its associated interests) voting in favour of the H&G partial takeover offer.
“St Laurence will be voting against the H&G takeover and we have received indications from other shareholders that they too will vote against the H&G bid to control REL.
“Even if REL shareholders are content to retain their REL shares, we urge them to vote against the H&G offer. Were the H&G offer to succeed, any future control premium payable for REL shares will be eliminated. For this reason, we strongly advise those REL shareholders wanting to retain their shares to vote against the H&G bid to gain control of the company.
“The St Laurence increase to $1.60 per share clearly provides those shareholders wanting to sell with the best price. It also provides certainty in that it is not subject to any shareholder approval or achieving control of the company. However, St Laurence does not intend to accept shares offered to it after 2 July 2004 so we encourage shareholders wanting to sell to respond promptly.
interest in REL has already delivered value to its
shareholders. H&G pitched its initial offer at $1.25. Our
initial price came in at a 20% premium over that and we are
determined not to see H&G wrest control of REL at a
discounted price,” Mr Podmore