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  • Oliver’s Real Food (OLI) has five days to decide the fate of a takeover offer after EG group denied a waiver that would allow a takeover to occur, even though Oliver’s has exceeded its net debt limit
  • In March, the companies entered into a scheme implementation deal, where EG was set to purchase all of Oliver’s shares at 10 cents each
  • However, just last week, Oliver’s exceeded its net debt limit by $110,000
  • Oliver’s then asked EG for a waiver, but today the group has said ‘no deal’
  • EG says it will consider an alternate proposal from Oliver — if one is made
  • Oliver’s is down 22.5 per cent on the market today, selling shares for 3.8¢ each

Oliver’s Real Food (OLI) has five days to decide the fate of a takeover offer after EG group denied a waiver that would allow a takeover to occur, even though Oliver’s has exceeded its net debt limit.

EG Group is a British retailer which owns petrol stations and fast food outlets in Europe, the United States and Australia.

In early March, the healthy fast-food company received an offer from EG Group to purchase all of its shares for 10 cents each.

Just hours after, Oliver’s entered a scheme implementation agreement with EG and told its shareholders to agree to the deal as it is favourable to the company.

However, last week, the deal was in hot water as Oliver’s exceeded its net debt limit by $110,000.

Under the initial agreement, Oliver’s or its subsidiaries could exceed the net debt limit of $800,000. But after reaching a $910,000 debt ceiling, the company called for a waiver.

Oliver’s says the increase comes as a result of COVID-19, which has forced the company to suspend operations.

EG Group responds

Despite the call for help, EG Group has told Oliver’s it does not agree to the waiver, but will let the company come up with an alternate proposal.

“In light of the circumstances, I understand that your board may wish to put an alternate proposal to us regarding the mutual termination of the SID (scheme implementation deal) and potential entry into other arrangements,” EG told Oliver’s.

Oliver’s and EG will now consult with each other throughout this week.

Oliver’s is down 22.5 per cent on the market today, selling shares for 3.8¢ each at 3:16 pm AEST.

OLI by the numbers
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