JOHANNESBURG (miningweekly.com) – The board of Brisbane-based engineering, procurement and project management company Ausenco on Tuesday recommended a takeover offer from private equity firm Resource Capital Fund VI (RCF VI), which valued the company at A$153.7-million.
Ausenco had formed an independent board committee (IBC) in May to consider RCF VI’s proposal to privatise the company by way of a scheme of arrangement. The private equity firm offered shareholders A$0.40 a share.
“The proposal is at a significant premium to market value and on terms which, given the circumstances that we face with the near-term maturity of our secured debt, we believe reflect fair value,” said Ausenco chairperson, George Lloyd, who is also the chairperson of the IBC.
The offer represented an 18% premium to the closing price of A$0.34 a share on June 13 and a 67% premium to the undisturbed three-month volume weighted average price of A$0.239 a share.
“Ausenco operates in a dynamic and challenging market, which would present ongoing uncertainties and risks to the company if it were to continue independent operation. In that context, the IBC believes that shareholder value will be maximised and Ausenco will be best positioned to succeed in the future through the proposed transaction,” Lloyd said.
Commenting on the proposed scheme, RCF Management and the investment adviser to RCF VI, Peter Nicholson, said that RCF VI believed the proposal provided Ausenco shareholders with certainty in a “volatile and challenging market” for mining services businesses.
If the scheme was approved at a shareholder meeting, scheduled for late August, RCF VI had confirmed that it would convert its A$61-million secured debt facility into 97-million shares in Ausenco. RCF VI might also elect to convert all, or part of, its working capital facility into Ausenco shares at the same price as the offer.