Paper company and wide format supplier Spicers has won approval from the Federal Court of Australia to call a meeting of its shareholders next month to vote on the proposed takeover of the business, formerly PaperlinX, by Kokusai Pulp & Paper (KPP).
Spicers’ board of directors has unanimously recommended that shareholders vote in favour of a 'Scheme of Arrangement' that would see the company sell its entire Australia and New Zealand operations to Japan-based global paper giant KPP for $A147.6 million, equivalent to about 7c a share. Spicers is currently trading at 6.8c a share.
In an Explanatory Booklet for shareholders, Spicers said: Your Directors unanimously recommend that you vote in favour of the Scheme and the Capital Return, in the absence of a Superior Proposal and subject to the Independent Expert continuing to conclude that the Scheme is in the best interests of Spicers Shareholders.
The Independent Expert has assessed the of Spicers Shares at between 6.6c and 7.5c.
Spicers' board warned that the share price is likely to fall in the near term if the deal is rejected by shareholders.
If the Transaction is not implemented, and in the absence of a Superior Proposal, Spicers Shares are likely to trade below the price at which they have traded since announcement of the Transaction on 17 January 2019.
In addition, the future trading price of Spicers Shares will continue to be subject to market volatility, including general stock market movements, the impact of general economic conditions and market demand for listed securities, compared to the value of $0.070 (7.0 cents) cash per Scheme Share currently expected to be received under the Transaction.
“Our business is in an excellent position and our strategic focus over the past two years has delivered improved value for our current shareholders,” said Spicers CEO David Martin. “I see many advantages for the Spicers business in taking this step to become part of a successful, global, business with a willingness to invest for growth in our key revenue streams of Print & Packaging, Sign & Display and Architecture & Interior Design.”
The shareholders meeting will be held at 10:00am Melbourne time on Wednesday, 26 June 2019 at the Computershare Conference Centre, Yarra Falls, 452 Johnston Street, Abbotsford, VIC.
