IOOF will take over DKN Financial Group for $0.80 a share and the parties have entered into a scheme implementation agreement, which values DKN at $115.4 million.
"We believe this is a compelling offer for DKN shareholders, offering 100 per cent cash, an attractive premium and an opportunity for DKN shareholders to crystallise immediate and certain value for their stock," IOOF chair Ian Blair said.
IOOF announced on 14 June that it had submitted an indicative proposal to the DKN board to acquire, through Austselect, 100 per cent of the ordinary shares it did not already own in DKN for $0.75.
The proposal was subject to certain conditions, including the unanimous support of the DKN board members capable of voting on the proposal. These conditions have now been satisfied and the parties have entered into a definitive agreement relating to the proposal.
IOOF already holds a relevant interest in DKN of 18.49 per cent through its wholly-owned subsidiaries.
DKN shareholders will receive up to a $0.025 dividend per DKN share (unfranked) in relation to the second half 2011 results, before the proposal becomes effective.
"IOOF has a longstanding and mutually beneficial relationship with DKN, both as a shareholder and also as a long-term business partner, and we are pleased to have the opportunity to cement this partnership formally. In line with our adviser-driven growth strategy, this transaction will enable increased cross-selling through the combined group, while adding strength and depth to our distribution network," IOOF chief executive Chris Kelaher said.
"Our intention is to maintain the current Lonsdale operating model, including its current platform offering, within the combined business. This will ensure continuity of the existing Lonsdale client proposition, while providing additional benefits through an expanded range of products and services.
DKN's equity partners should also benefit from IOOF's scale and commitment to growth. IOOF has a strong track record in unlocking the potential of businesses and supporting their growth. This transaction presents an opportunity to deliver benefits to all DKN stakeholders."
DKN is expected to hold a shareholder meeting in September to allow shareholders to vote on the offer.
