March 08, 2024 | Industrials | Asia | Active
French construction materials company Saint-Gobain announced on 26-Feb-24 that it has entered into a scheme implementation deed (SID) to acquire Australian rival, CSR, in a deal valued at AUD 4.5bn. Saint-Gobain will pay AUD 9.00 per share, representing a 32.9% takeover premium over CSR’s undisturbed price on 20-Feb-24, the day before Bloomberg reported on initial takeover talks. The companies subsequently confirmed on 22-Feb-24 that an indicative proposal was tabled. If the scheme is delayed beyond 26-Jun-24, an AUD 0.02 per month ticking fee will take effect. CSR is permitted to pay a fully-franked dividend of up to AUD 0.25, but this will be deducted from the offer consideration. Saint-Gobain’s board unanimously approves the scheme and CSR’s board has unanimously recommended that its shareholders vote in favour of the transaction, subject to a fairness opinion. Each CSR director intends to vote in favour of the deal. The SID imposes customary exclusivity obligations on CSR, including no-shop, no-talk, and no-due diligence provisions, but with customary fiduciary exceptions, notification requirements, and a matching right. The deal is subject to CSR shareholder approval (75%) and approval from Australia’s Foreign Investment Review Board (FIRB). Regulatory notifications were anticipated to be made by 6-Mar-24. Clauses on reasonable best efforts require Saint-Gobain to agree to any conditions imposed by a government agency as long as such conditions do not have a material impact on the expected value “to be obtained by Saint-Gobain from the transaction as a whole or conduct or on the operation of the CSR Group’s business after implementation of the scheme.” A MAC is defined to encompass a reduction of CSR’s consolidated net assets by more than AUD 180m and a recurring EBITDA decline by more than AUD 65m, with both metrics measured against “what it would reasonably have been expected to have been.” CSR generated AUD 414.6m in EBITDA for its fiscal year ending 31-Mar-23, and consensus is for the company to report its 2024 fiscal year EBITDA, ending 31-Mar-24, at AUD 402.9m, per Bloomberg. The indicative timeline estimates that the scheme booklet will be submitted to the Australian Securities and Investment Commission (ASIC) in ...
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