Capilano shareholders to vote on takeover

Capilano shareholders to vote on takeover

Honey producer Capilano (ASX: CZZ) has announced it is being eyed for potential takeover by a consortium of private equity funds.

This morning, the listed company told shareholders of its recommendation to allow the consortium of firms to take over the company.

Capilano has entered into a scheme implementation agreement with Bravo HoldCo, an entity owned by Wattle Hill RHC Fund 1 (Wattle Hill) and ROC Capital Pty Ltd (Roc Partners).

The company has unanimously recommended shareholders accept that agreement.

Under the deal, HoldCo will acquire 100 per cent of the share capital of Capilano, giving shareholders $20.06 per share in cash; a premium of 28.2 per cent to the last close.

Shareholders can also elect to take a scrip alternative with the potential to participate in the future of Capilano through an all-scrip 1:1 offer.

The scheme is conditional on shareholders representing at least 15 per cent electing to receive scrip. If scrip elections and Subscription Offer applications collectively exceed 49.9 per cent of HoldCo shares, scale back arrangements will apply.

According to Capilano, major shareholder Wroxby Pty Ltd - which currently holds 20.6 per cent of Capilano shares - has indicated that it intends to vote in favour of the scheme and to elect to receive scrip consideration rather than cash consideration, ensuring the minimum scrip consideration is met.

The vote to decide the future of the honey manufacturer will be held in November 2018, with the implementation of the takeover to begin in December 2018.

Capilano chairman Trevor Morgan says shareholders would be wise to take this deal now to realise their investment early.

"The Board remains confident that Capilano is well positioned to deliver growth across its brand portfolio in both the domestic and export markets," says Morgan.

"This growth, particularly our investment into our premium and therapeutic brands and marketing into the Asian region, will take time and involve execution risks. Therefore, we believe shareholders should have the opportunity to realise their Capilano shares in cash now."

Capilano managing director Ben McKee says the consortium is primed to take the brand to the next level.

"The Consortium will being added capability necessary to build our brands on a truly global scale," says McKee.

"In particular Wattle Hill's strong relationships in Asian markets provides an opportunity to unlock the potential of Capilano Group's premium and therapeutic brands. The Consortium understand the importance of our Beekeeper network and outlined its intention to invest further into the industry."

The scheme requires approval of 75 per cent of all votes cast by shareholders and a minimum of 50 per cent of all shareholders to vote. The future of Capilano will be decided at a shareholder meeting in November 2018.

Shares in Capilano are up 26.45 per cent to $19.79 per share at 10.35am AEST.

Never miss a news update, subscribe here. Follow us on Facebook, LinkedIn, Instagram and Twitter.

Business News Australia

Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support

Four ways businesses can use artificial intelligence to triumph in 2022
Partner Content
The last two years have delivered major disruption to the technology industry and broad...
PROS
Advertisement

Related Stories

Zip Co annual transaction volume tips over $10 billion mark

Zip Co annual transaction volume tips over $10 billion mark

Australian buy-now pay-later (BNPL) giant Zip Co (ASX: Z1P) is now ...

QLD Premier confirms borders to reopen four days early

QLD Premier confirms borders to reopen four days early

With Queensland health authorities expecting the 80 per cent double...

Douugh builds on momentum with $8 million capital raise

Douugh builds on momentum with $8 million capital raise

Digital bank Douugh (ASX: DOU) has announced an $8 million capital ...

Cyber weekend sales make November the biggest month in Australian online shopping history

Cyber weekend sales make November the biggest month in Australian online shopping history

November was the biggest month in Australian online shopping histor...