TPG returns for another crack at InvoCare with $1.9b takeover bid

Three weeks after investment giant TPG Global pulled out of discussions to acquire funeral operator InvoCare (ASX: IVC), the suitor has returned today with a slightly improved takeover bid that has finally piqued the interest of the target’s board.

InvoCare this morning announced that TPG Capital - an investment firm behind the likes of Airbnb and Chobani - has put forward an improved bid of $13 per share via an all-cash offer, giving the White Lady Funerals owner an equity value of $1.9 billion, which is $100 million more than TPG’s initial proposal lobbed in early March.

This increase has been enough for InvoCare’s board to unanimously recommend the offer as long as it becomes a binding transaction. As such, the target has agreed to provide TPG the opportunity to undertake due diligence on an exclusive basis.

At $13 per share, the revised proposal represents a 45.3 per cent premium to InvoCare’s closing share price on 6 March - one day before the initial proposal was put forward.

In addition, under the new bid InvoCare is also permitted to pay a fully franked special dividend of a cash amount - currently expected to be approximately 60 cents per share - prior to the transaction implementation. The company notes that the scheme consideration received by shareholders will be reduced by the cash amount of this special dividend.

The deal is also subject to customary conditions including TPG completing satisfactory due diligence, final approval from TPG’s investment review committee, entry into a binding agreement and a unanimous recommendation from the board of directors vote in favour of the transaction.

“If TPG provides a binding proposal at no less than $13.00 per InvoCare share, the InvoCare Board unanimously intends to recommend that InvoCare shareholders vote in favour of the proposed scheme of arrangement,” InvoCare said.

“InvoCare notes that there is no certainty at this stage that the Revised Proposal will result in a binding scheme implementation deed for consideration by shareholders.”

Shares in IVC are rising this morning to meet the $13 per share offer from TPG, and are up 11.45 per cent to $12.36 per share at the time of writing.