Nylex (NLX), manufacturer and distributor of plastic products, soared by as much as 33.7% on Monday following a takeover proposal from CHAMP Private Equity, a private equity fund.
The bid was received after the market closed on Friday, propelling the shares to open at a 31% premium of $2.41 on Monday morning.
Stock ranged between $2.41 and $2.46 during intraday tradingto close at $2.30.
Close to 1 million shares had changed hands.
Its two major shareholders Harmony Investment Fund and Garden Park Equities have signed pre-bid agreements for up to 19.9% of Nylex's ordinary shares outstanding.
CHAMP is offering a 100% cash offer of $2.65 per ordinary share or convertible note and $0.81 per option. The offer represents a 44% premium over Nylex's closing price on Friday of $1.84.
"If a firm offer is received from CHAMP by 16 January 2008 with conditions that are consistent with those set out in CHAMP's non-binding proposal, it is the board's current intention to unanimously recommend that offer to security holders in the absence of a superior proposal or adverse opinion from an independent expert," the company said in a statement to the stock exchange.
CHAMP and NYLEX have negotiated an exclusivity period until up to 31 January 2008 to undertake due diligence and negotiate an implementation or bidding agreement and has agreed to customary no-shop and no-talk arrangements.
If by that date Nylex does not recommend the proposed CHAMP offer, it will be liable for a $1.5 million break-fee.
