Sydney based private equity group, PEO (Pacific Equity Partners) has swooped on Canberra-based IT services company Citadel Partners with a 43% premium offer that won the day.
Not that there was any contest – the bid came from out of the blue yesterday and when approved by the end of the year, will see PEP paying $5.70 a share.
That’s a premium of more than 43% above Friday’s closing Citadel price of $3.98 a share.
The deal values Citadel at about $503 million (including around $55 million in debt). Citadel shares ended up 40% to $5.56.
The offer price will be reduced by Citadel’s intention to declare a fully franked special dividend of up to 15 cents a share on top of a final dividend of 6 cents per share already declared.
That will reduce the offer price to $5.50 a share, although should a rival emerge with a higher offer, that condition could easily be dropped.
Citadel’s board has unanimously recommended that shareholders vote in favour of the scheme of arrangement in the absence of a superior proposal and subject to the independent expert concluding that the scheme is in the best interests of Citadel shareholders.
“The scheme is an attractive transaction which provides an all-cash option for Citadel shareholders,” Citadel Group chairman Peter Leahy said in a statement to shareholders.
“The Citadel board has unanimously concluded that the scheme represents a compelling outcome for our shareholders, customers, suppliers, and staff.
“The price is a very tangible measure of the value and quality of Citadel’s industry-leading expertise in specialist software and critical secure information management in complex environments like healthcare, defence and national security, government and tertiary education. At a significant premium to the current trading price, PEP’s offer provides Citadel shareholders with certainty of value and the opportunity to realise their investment in full for cash.
“Citadel’s customers will benefit from access to a broader product suite and service capability given Citadel’s ability to invest more in growth markets and sectors, and further develop its industry-leading software solutions, with PEP’s backing. In addition, the scheme is positive news for Citadel staff, as we believe there will be increased opportunities to develop new technologies with new partners and advance and grow their careers,” he added.