The acceptance of the takeover will see London City, who holds a 7.4 per cent stake in Tranzact, receive $1,004,728 in consideration, which compares favourably to the $712,000 market value but is below the book cost of $1,164,000.
London City chose to accept the takeover despite concerns relating to some of the aspects in the offer after the Takeovers Panel decided not to take proceedings further in the matter.
In its application to the Takeovers Panel, London Equities said it was concerned about the “failure to use 2014 profit expectations in assessing ‘maintainable earnings’”; “the oversight in not valuing the Smart-Save Superannuation Fund of $235 million on a percentage of FUM basis”; and “the continual reliance on the bidder’s executive for information”.
London City Equities also said that Tranzact shareholders “were rushed into accepting the offer and did not have a reasonable time to consider the proposal”.
The Gro-Aust offer will see Tranzact shareholders receive 12 cents for each Tranzact share.
