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- CML continues to recommend a merger with Consolidated Operations Group (COG) to shareholders, despite ongoing due diligence by prospective buyer Scottish Pacific Group
- COG first proposed a scheme of arrangement in November 2019, valuing CML at 48 cents per share
- Last month, however, Scottish Pacific placed a conditional offer which valued CML at 57 cents per share
- An update on the status of the Scotpac proposal is expected February 3, two days before a COG merger vote February 5
- In the meantime, CML maintains it will keep encouraging shareholders to consider the COG merger
- CML is up 0.92 per cent on the market today, trading for 55¢ apiece at 3:36 pm AEDT
- Meanwhile, COG is trading lower — down 2.35 per cent to sell for just over eight cents each
CML continues to recommend a merger with Consolidated Operations Group (COG) to shareholders, despite continued due diligence by prospective buyer Scottish Pacific Group.
The ASX-listed provider of debtor finance updated the market on Scotpac’s due diligence activities this morning, saying that checks were progressing as planned.
In the meantime, CML maintains it will keep encouraging shareholders to consider the COG merger.
The COG proposal
COG first proposed a scheme of arrangement in November 2019, submitting an offer that valued CML at 48 cents per share.
Australia’s largest asset finance broker said a merger with CML would create “a fully integrated broking and finance platform, targeted at the rapidly expanding Australian SME market”.
In late December, the Federal Court gave the green light to COG to dispatch a scheme booklet to CML shareholders. The Court also ordered CML to arrange a scheme meeting so shareholders could consider and vote on the proposed merger.
In today’s announcement, CML reaffirmed the scheme meeting and vote would progress as planned, encouraging shareholders to attend on February 5.
Scotpac’s offer
Last month, Scottish Pacific placed a conditional offer which valued CML at 57 cents per share.
Both the COG and Scotpac offers include a 3 cent per share fully franked dividend to be paid out by CML.
Scotpac’s offer, however, is subject to a series of conditions; the company needs to complete a range of commercial, operational, financial and legal due diligence checks.
The CML share price responded well to the competing bid, jumping from 47.5 cents to 56 cents on the same day the indicative offer was released.
While the company maintains its recommendation of the COG merger, the group has admitted the Scotpac offer constitutes a “superior proposal.”
Although COG says nothing currently suggests a binding offer will be submitted, a definitive competing merger could spark an investigation.
“Should the Indicative Scotpac Proposal become a binding offer it will raise serious competition issues that may lead to an investigation of the proposed merger of CML and Scotpac by the Australian competition regulator.”
Consolidated Operations Group, December 19 announcement to ASX
CML anticipates it will provide a market update on the status of the Scotpac proposal on February 3, two days before the scheme meeting.
CML’s scheme meeting
On January 27, shareholders can elect to receive a mix of cash and COG shares or just stakes in COG following an agreement.
If a shareholder does make a decision, he or she will receive the cash and scrip option by default if the merger goes ahead.
Stakeholders will vote on the proposed COG merger on Monday, February 5. Until then, a potential binding Scotpac proposal remains on the table.
CML is up 0.92 per cent on the market today, trading for 55¢ apiece at 3:36 pm AEDT. Meanwhile, COG is trading lower — down 2.35 per cent to sell for just over eight cents each.
