Engenco Limited’s board is now recommending shareholders accept Elph Investments Pty Ltd’s increased all-cash takeover offer of 31 cents per share. This recommendation comes despite the independent expert’s valuation of 31.8 cents per share and the offer remaining conditional. The key driver for the change in stance is that Elph’s increased offer is final and will not be increased, plus that significant shareholders, Thorney Investment Group (10.76%) and RAC & JD Brice Superannuation (5.47%), appear to have already accepted the offer, pushing Elph Investments’ stake to 88.98%.
The Engenco board cites several reasons for its recommendation. The increased offer represents a 47.6% premium to the closing price of 21 cents on March 6, 2025, before the initial offer was announced. They also believe it’s unlikely any higher offer will emerge, given Elph’s declaration of finality and the absence of competing proposals. The board highlights the certainty of the all-cash consideration, which removes the risks of remaining a shareholder in a company with low trading liquidity.
Furthermore, since the announcement, Engenco’s share price has consistently traded below the increased offer price. The recommending directors acknowledge that Elph Investments’ holding is nearing the 92.13% threshold for compulsory acquisition. They believe shareholders are better off accepting the offer now rather than waiting for the compulsory acquisition process. The directors themselves intend to accept the offer for all shares they own or control. The offer closes on June 27, 2025, unless extended, and shareholders are urged to act promptly.
