Shares in pet and vet group, Greencross’ jumped 19% on Monday to $5.40 after the board fell over and agreed to be taken private by US buyout group, TPG.
That was after Greencross’s board accepted a $5.55 per share takeover bid from TPG Capital.
The company owns 250 pet stores under the Petbarn and City Farmers brands, as well as 190 vet clinics and emergency animal hospitals across the country.
The $5.55 a share offer is a 34% premium to Greencross’ closing price of $4.14 on October 9, before Greencross announced it had received a takeover proposal.
There could be more as the statement yesterday reveals that “The payment of a fully-franked Permitted Dividend of up to $0.21 per share on or shortly before the implementation date of the Scheme is currently being reviewed by Greencross.
And the statement also states that “Those shareholders who are able to realise the full benefit of franking credits will receive up to $5.64 value per share in respect of the Scheme (assuming that the full Permitted Dividend is paid), “ directors said.
However, the deal is less than the $6.75 a share investors would have received if Greencross accepted a 2016 offer from TPG.
Greencross’ after-tax profit jumped from $34.6 million in 2016 to $42.1 million in 2017, but last year plunged 51% to $20.7 million, driven by write-downs to the value of its technology systems and a restructuring.
On an underlying basis, which removes the impact of impairments, after-tax profit fell 14 percent to $37.2 million.
“The board has unanimously concluded that the [takeover] is a compelling option which realises attractive value for our shareholders,” Greencross chairman Stuart James said in a statement.
“As a former investor in Petbarn… we are confident that TPG will continue to support the ongoing success of the business.”
TPG’s head of Australia and New Zealand, Joel Thickins, said in a statement Greencross would “continue to grow and provide world-class services to the increasing number of pet lovers in Australia and New Zealand” under TPG’s ownership.
TPG previously owned a stake in the Petbarn business and last year formed Independent Pet Partners, which has begun buying up medium-sized independent American pet store chains.
Greencross Shareholders will vote on the offer early next year.
