Sedgman has agreed to CIMIC’s takeover offer.
It comes more than a month after CIMIC – owner of Thiess and Leightons – made a move to acquire 100 per cent of Sedgman.
It put forward $1.07 in cash per Sedgman share as a final offer – a $256 million bid – which is a 35.4 per cent premium on Sedgman's closing price of $0.79 share value and market cap of $185 million at the time of offering.
As part of the deal CIMIC intends to change the Sedgman board and continue its plans to diversify its commodity focus, as well as retain all current employees or move them to alternative employment in CIMIC.
Following the offer Sedgman advised its shareholders to ignore the bid for the time being.
“At this time the Sedgman board recommends that shareholders take no action in relation to their shares of the offer,” it said in a company statement.
“The Sedgman board has formed a sub-committee, comprising the current directors but excluding the CIMIC nominee director, to consider the offer and will provide its recommendation to shareholders once it has done so.”
The contractor has now fully backed CIMIC’s offer, its board unanimously recommending shareholders accept the unsolicited offer.
In Sedgman’s statement, it explained that CIMIC will exert increased influence over the company, “and its intentions in relation to Sedgman’s existing board, management, and ongoing strategy are unclear and may not be conducive to ongoing value creation for minority shareholders”.
It was revealed that CIMIC may also delist Sedgman from the ASX.
On the back of this Sedgman’s current chairman has also resigned.
“While I live the company, and believe that it has considerable potential, I must tell you that on the passing of control of your company to CIMIC my current intention is to resign as your chairman after the conclusion of the offer period,” Sedgman chair Robert McDonald said.
“With the change of control imminent I have accelerated my decision in light of CIMIC’s uncertain level of support for me and your existing board.”
The contractor’s share price leapt the day of the official offer, from 79 cents a share to $1.07 per share, and have progressed at around that price point since.