Fliway Group's board is backing a $55.4 million takeover bid by Singaporean logistics firm Yang Kee Logistics which offers investors a 13 per cent premium to its latest trading price, in a turbulent time for the transport firm since its listing in 2015.
The Auckland-based company has signed up to a scheme implementation agreement with Yang Kee for the Singaporean company to pay $1.22 a share, winning over controlling shareholder D&G Hawkesby Trust and the blessing of the independent directors.
The takeover bid comes just one week after Fliway's annual meeting where chair Craig Stobo and chief executive Duncan Hawkesby were upbeat about the prospects for the company as it recovered from losing a major customer last year and the disruption of the Kaikoura earthquake.
Yang Kee made a confidential approach to Fliways about a takeover and settled on the $1.22 a share price, which the New Zealand firm's independent directors say "represents a strong offer based on recent trading performance" and "provides an opportunity for shareholders to realise the full value of their Fliway shares now for 100 per cent cash consideration".
The offer is a 13 per cent premium to the $1.08 price the shares closed at yesterday and a 16 per cent premium for the weighted average price over the past month. However, it's just a 1.6 per cent improvement on the $1.20 price they were sold at in an initial public offering, the bottom end of the indicative range in March 2015, which valued Fliways at $54.5m.
"The independent directors considered the advantages and disadvantages of the scheme proposal and concluded that the scheme provides certainty regarding the future value of the shares," Stobo said.
If the deal is approved, Hawkesby will stay on as managing director for the 2018 financial year and continue on as a director with transitional role after that, while the company will delist and become part of the wider Yang Kee group.
The scheme needs shareholder approval with 75 per cent support from all votes cast and at least half of all voting rights voted. It also needs High Court approval.
KordaMentha has been hired to write an independent adviser's report for shareholders to consider ahead of a special meeting expected in late November. First NZ Capital and Belly Gully advised the Fliways board during negotiations.
The deal has to be completed by May 31, 2018 unless the parties agree to push out the date.