- Redflex Holdings’ (RDF) proposed acquisition by a Verra Mobility subsidiary is facing delays in its approval process
- The acquisition’s scheme of arrangement cannot become effective without approval from the General Authority for Competition (GAC) in Saudi Arabia
- Verra Mobility representatives have said that GAC approval might not be obtained until the end of May, or even later
- The company may ask Australia’s Federal Court to vary the scheme, so that GAC approval can be satisfied at a later date
- Redflex Holdings is in the grey and trading at 94 cents per share
Redflex Holdings’ (RDF) proposed acquisition by a Verra Mobility subsidiary is facing delays in its approval process.
In late January of this year, the traffic technology company entered into a scheme implementation agreement with NASDAQ-listed company Verra Mobility. Under the agreement, Verra Mobility’s indirect but wholly owned subsidiary, VM Consolidated, proposed to acquire all share capital in Redflex.
Through the all-cash offer, each Redflex shareholder would receive 92 cents for each share they held in the company. Redflex’s Board of Directors unanimously recommended that shareholders support the proposed scheme.
However, the acquisition’s scheme of arrangement cannot become effective without approval from the General Authority for Competition (GAC) in the Kingdom of Saudi Arabia. Verra Mobility applied to the GAC for the approval, but this process is taking longer than expected.
Representatives of Verra Mobility have informed Redflex that GAC approval may not be obtained until the end of May, or even possibly later. As such, the approval is unlikely to be obtained in time for the second Court hearing, scheduled for May 14, 2021.
Redflex also has a shareholders’ meeting scheduled for May 10, 2021, where the company will see shareholder approval for the acquisition scheme.
If the resolutions to approve the scheme are passed by the requisite majorities of shareholders, and all other relevant conditions are satisfied or waived by May 14, Redflex plans to seek orders from the Federal Court of Australia at the second Court hearing. These orders would ask the Court to vary the scheme, so that GAC approval would become a condition that can be satisfied at a later date.
Redflex Holdings is in the grey, trading at 94 cents per share at 3:01 pm AEST.