Among the stories doing the rounds during Wednesday’s ASX trading session were these two from Viva Energy and Estia Health.
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Australia’s vulnerability to interruptions to supplies of petrol have again been exposed by an accident at the Viva Energy (ASX: VEA) refinery in Geelong, near Melbourne where a crane failure caused a compressor to be dropped to the ground and badly damaged.
Viva told the ASX on Wednesday, the accident could cost it more than $100 million.
“The compressor was being installed as part of the major maintenance turnaround currently underway at the refinery,” the company told the ASX.
Viva anticipates repairs could take up to three months to complete, resulting in losses of between $25-35 million a month due to “production and margin impacts.”
No one was injured in the incident and Victoria’s WorkSafe has been notified.
Viva says it’s launched an investigation into the cause of the incident, but does not expect supply to the market will be disrupted.
“The company has insurance coverage for property damage and business interruption, which we expect will materially reduce the extent of this anticipated financial impact,” Viva stated.
Viva’s Corio refinery is one of two still operating in Australia. The other is the Lytton refinery in Brisbane owned by Ampol.
Viva shares lost 2.8% to $3.11.
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Shares in aged care operator, Estia Health (ASX: EHE) leapt more than 13% on Wednesday after the company’s board went close to throwing in the towel on a bid from Bain Capital. The shares ended at $2.89 after increasing its takeover bid by 6%, valuing the company around $827 million.
The higher price of $3.20 a share, from the $3 pitched in March, won guarded approval from the board yesterday as well as Estia’s largest shareholder, Wilson Asset Management. It described the increase on a proposal as a “positive outcome” for investors.
But the fact that the shares fell short of the new price of $3.20 indicates there’s still a lot of scepticism that the 20 cents a share extra will win the day, though the new price is the highest for the shares in five years.
The $3.20 price will be reduced by any cash dividends declared and paid after the date of the revised proposal.
Estia said in a statement to the ASX on Wednesday that it “is permitted to pay ordinary dividends of up to $0.12 cash per share, which would not be conditional on a scheme of arrangement proceeding. “
“Payment of a $0.12 per share fully franked dividend would enable eligible Estia Health shareholders to receive approximately 5.1 cents per share in additional benefit from franking credits, depending on their tax circumstances.”
Estia said it had entered into a process deed with Bain Capital in order to progress a potential transaction.
“Following careful consideration of the Revised Proposal the Board of Estia Health has determined that it is in the interests of shareholders to progress the Revised Proposal and allow Bain Capital to undertake further due diligence to enable it to provide a binding proposal,” the board said in Wednesday’s statement.
“If Bain Capital provides a binding proposal consistent with the terms of the Revised Proposal and subject to entry into a binding scheme implementation deed in a form acceptable to Estia Health, the Board of Estia Health intends to unanimously recommend that Estia Health shareholders vote in favour of the Potential Transaction in the absence of a superior proposal and subject to an independent expert concluding, and continuing to conclude, that the Potential Transaction is in the best interests of Estia Health shareholders.”
