Costa Group (ASX: CGC) has confirmed the receipt of a takeover offer from existing shareholder Paine Schwartz Partners (PSP) that values the fruit and vegetable company at more than $1.6 billion, although the indicative proposal is still subject to due diligence and other conditions.
After speculation yesterday that lifted CGC shares by more than 15 per cent, Costa has today confirmed that more than a month ago on 31 May it received confidential, non-binding indicative proposal from the US sustainable food chain fund wished to acquire all shares it did not already hold.
The $3.50 per share proposal would represent a 34.6 per cent premium to what PSP paid in October to acquire a substantial interest of 13.78 per cent in the company.
The US investor has been involved in the Costa Group journey for much longer than that however, having been a majority owner of the company prior to its 2015 initial public offering (IPO) on the ASX with its first equity stake acquired in 2011, back when its name was Paine + Partners.
Shares have climbed almost by another 12 per cent this morning to $3.30 at the time of publication, representing an 18 per cent surge since before the takeover speculation was made public but still short of the levels put forward in the offer.
"The Costa board, together with its financial and legal advisers, carefully assessed the indicative proposal when received and determined it was in the best interests of shareholders to grant PSP an eight-week period of non-exclusive due diligence to enable PSP to determine whether to put forward a binding proposal. The due diligence period commenced on 6 June 2023," Costa stated in today's announcement.
"Notwithstanding recent media speculation that Costa and PSP were hopeful of an agreed deal in coming days, further due diligence and negotiations on a potential scheme implementation agreement are expected to continue through July.
"There is no certainty that the Indicative Proposal will result in a binding offer or that any transaction will eventuate."
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