Japanese group Hitachi Construction Machinery Co (HCM) has all but won control of Bradken (BKN) after a day of corporate manoeuvring in its $976 million bid that saw the company’s biggest shareholder accept the offer.
Hitachi launched the $3.25 a share offer last October which valued Bradken at $689 million, plus debt which boosted the total value to $976 million.
First up Hitachi announced through its Australian lawyers that it had received direct acceptances totalling 18.75% of Bradken and that another 7.29% had been accepted into the institutional acceptance facility (an IAF, which allows for big shareholders to accept provisionally), giving the Japanese group a stake of 26.55% of Bradken’s issued shares.
Hitachi said that it would now “waive the 50% minimum acceptance condition and declare its Offer completely unconditional on the next Business Day after the aggregate of the Bradken Shares in which HCM has a relevant interest as a result of acceptances of the HCM Offer; plus, any Bradken Shares that are the subject of IAF Acceptances, is equal to or greater than 35% of the Bradken Shares on issue.”
In other words once acceptances reached 35%, the 50% acceptance condition would no longer apply and the bid would become unconditional, meaning shareholders who didn’t accept the offer might be not accept accelerated payment if their acceptances were not received by 7pm yesterday.
That threat saw Bradken’s biggest shareholder, CHAMP Private Equity decide to accept the offer for its 17% stake. That boosted hitachi’s holding to more than 43% and well over the 35% cutoff. That was announced yesterday afternoon in a statement from Bradken
"Following the announcement released to the ASX by Hitachi Construction Machinery Co., Ltd (“HCM”) earlier today, Bradken has been advised by its major shareholder, CHAMP Private Equity Pty. Ltd. (“CHAMP”) that it will accept the HCM Offer today. Bradken therefore understands that, following CHAMP’s acceptance, HCM will declare the Offer unconditional tomorrow.
CHAMP CEO, Mr. John Haddock said: “Following HCM’s announcement this morning, CHAMP will accept the HCM Offer today. CHAMP is proud of its long relationship with Bradken and wishes both Bradken and HCM the best of success in the future.”
Bradken’s chairman Mr. Phil Arnall said in the statement: “I am very pleased that given HCM’s announcement earlier today and CHAMP’s decision, the HCM Offer should be declared unconditional tomorrow and that this process is moving towards completion. I have similar sentiments to those expressed by John Haddock and note that CHAMP has been a supportive partner to our company since 2001.”
Mr Arnall added, “I would encourage all shareholders to accept immediately as we expect that only those shareholders whose acceptances are received by 7pm (AEDT time) today will be assured of accelerated payment.”
