Shares in glassmaker and packaging group, Orora (ASX:ORA), were up more than 19 per cent in late morning trading after it confirmed and rejected a takeover approach from a US private equity bottom fisher.
Market reports had said US group, Lone Star, was sniffing around Orora as its big French takeover in 2023 weighs on the share price with a less-than-stellar performance.
On Tuesday morning, Orora issued a statement to the ASX revealing the approach and its rejection – the point of rejecting any further talks.
Orora said it had rejected the "opportunistic, conditional, and non-binding indicative proposal from Lone Star Fund XII Acquisitions, LLC to acquire 100 per cent of the issued shares of Orora by way of a scheme of arrangement."
The price in the statement was $2.55 a share – less any dividends. That saw the shares jump more than 20 per cent to a day’s high of $2.29 and then ease to around $2.09 by 11.30 am.
Orora shares were trading at well over $3 a year ago but weakened in the wake of the deal to buy French company, Saverglass, for $2.16 billion.
But by the time the deal had been announced, they had fallen to $2.69 and have continued easing – news at the interim earlier this year that sales in France were weak didn’t help as well.
The shares faded to $1.92 late last week before rumours of Lone Star’s interest started emerging.
On Tuesday, Orora told the ASX that its board, together with its advisers, had “carefully considered the Indicative Proposal and determined that it is not in the best interests of its shareholders to further engage with Lone Star on the basis of the Indicative Proposal, which materially undervalues Orora.”
“Orora shareholders do not need to take any action in response to the Indicative Proposal. Orora will keep shareholders updated in accordance with its continuous disclosure obligations.”
Orora said it will now be releasing its financial results for the year ending 30 June 2024 on Wednesday, 14 August 2024, and “looks forward to sharing an update on the progress it is making against its strategy.”
