- Smartgroup (SIQ) considers a buy-out proposal from TPG Global, LLC and Potentia Capital
- The consortium is seeking to buy all shares in SIQ via a scheme of arrangement
- Any potential deal remains subject to several conditions, with the consortium granted four weeks in which to conduct due diligence
- Shares are up 16.4 per cent to $9.15 each at 11:22 am AEST
Smartgroup (SIQ) shares jumped today after the company said it would recommend that shareholders vote in favour of a proposed buy-out.
SIQ develops technologies that enable organisations to manage employees and other aspects of business, including salary packaging and vehicle fleets.
The company recently received an indicative, non-binding and conditional proposal from a consortium comprising TPG Global, LLC and Potentia Capital to acquire 100 per cent of shares in Smartgroup via a scheme of arrangement.
The consortium also advised that the trustee for Aware Super would participate in the proposal as an equity co-investor.
Under the terms, SIQ said shareholders would receive a total cash consideration of $10.35 per share, reduced by any dividend or return of capital paid before the date of implementation.
Further, any franking credits attached to a dividend of capital return would be received by Smartgroup shareholders in addition to the proposed scheme consideration.
The proposal represents a premium of 31.7 per cent on Smartgroup’s closing price on September 28, and a premium of 38.6 per cent on the 90-day volume-weighted average price of SIQ shares at the same date.
Next steps
Notably, any potential deal remains subject to several conditions, including the completion of due diligence, final approval from the SIQ board and investment review committees of each consortium member, and the agreement of implementation terms.
The SIQ board has granted the consortium a window of four weeks in which to conduct due diligence and establish whether a binding transaction can be agreed.
Smartgroup said its board would recommend shareholders vote in favour of the proposal but could not guarantee a formal offer being made to the company.
Following the announcement, Smartgroup shares were up 16.4 per cent to $9.15 each at 11:22 am AEST.