Next Capital shoots another shot at Silver Chef acquisition

Next Capital shoots another shot at Silver Chef acquisition

UPDATE: Silver Chef takeover heats up as Blue Stamp demonstrates its worth

Just over a week after Silver Chef (ASX: SIV) rejected Next Capital's acquisition proposal and chose to side with the opinion of key shareholders demonstrating a "groundswell of distain" for Next's offer, the suitor has returned with a second attempt.

Next Capital has proposed to acquire Silver Chef's hospitality business by acquiring certain subsidiaries of the business for $15 million.

Under the proposal the Australian private equity firm would acquire seven of Silver Chef's subsidiary business which when collated are the parent's hospitality business.

"We believe this Proposal provides a viable and compelling alternative for Silver Chef in its efforts to avoid the very real and substantial near term risk of insolvency," says Next Capital.

In addition, Next Capital says its proposal is superior to the recapitalisation deal Silver Chef struck with key shareholder Blue Stamp Company last week.

That deal involves a fully underwritten, accelerated, renounceable, pro rata entitlement offer to raise around $50 million at $0.31 per share. The funds would be used to pay a $35 million syndicated debt facility and fund the transaction costs and working capital of the company.

"We also believe this Proposal provides a superior and executable alternative to the considerable uncertainty and risk inherent in the Blue Stamp highly conditional recapitalisation proposal," says Next Capital.

"That alternative has extensive conditions. Accordingly, there is considerable uncertainty as to whether Blue Stamp will have committed funding before the waiver review period with Silver Chef's lenders expires."

If the deal with Next Capital is accepted, Silver Chef would be left with the GoGetta business and its finance business.

"Next Capital sees its proposal as in the best interests of all Silver Chef shareholders and believe that Silver Chef shareholders will support the Proposal if given the choice," says Next Capital.

Silver Chef says it requires further time to consider the Next Capital proposal which "contains some complexity".

Additionally, Silver Chef has until the end of September to work out what the effect of initially dumping Next Capital's proposal will have on the business and its ability to comply with its obligations under the finance facilities.

Shares in Silver Chef are up 0.76 per cent to $0.66 per share at 10.17am AEST.

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

Business News Australia

Enjoyed this article?

Don't miss out on the knowledge and insights to be gained from our daily news and features.

Subscribe today to unlock unlimited access to in-depth business coverage, expert analysis, and exclusive content across all devices.

Support independent journalism and stay informed with stories that matter to you.

Subscribe now and get 50% off your first year!

Four time-saving tips for automating your investment portfolio
Partner Content
In today's fast-paced investment landscape, time is a valuable commodity. Fortunately, w...
Etoro
Advertisement

Related Stories

Ocean Guardian administrator in talks with "several parties" to secure its future

Ocean Guardian administrator in talks with "several parties" to secure its future

After two withdrawn initial public offering (IPO) attempts in 2018 ...

Westpac breached Banking Code of Practice in NT branch closure, putting vulnerable customers at risk

Westpac breached Banking Code of Practice in NT branch closure, putting vulnerable customers at risk

The independent body tasked with keeping bank behaviour in check ha...

Cyber security consultancy CSO Group to merge with AI enabler xAmplify

Cyber security consultancy CSO Group to merge with AI enabler xAmplify

Sydney-based cyber security consultancy CSO Group is set to join fo...

Julian Assange will be freed after striking plea deal with US authorities

Julian Assange will be freed after striking plea deal with US authorities

Julian Assange has reached a deal with the United States Department...