W Advises Shareholders To “Wait For Further Advice” On Wrightson Offer
The shareholders of rural services company Williams & Kettle Ltd (W) are being advised to adopt a wait-and-see position on the current takeover offer from Wrightson Ltd.
W Chairman John Bayly says a Committee of Independent Directors established to consider the Offer has decided to make no
recommendation at this stage on whether shareholders should accept or reject the Wrightson offer.
He says that based on a number of important factors considered by the Independent Committee, shareholders are advised to
wait for further advice from the Independent Committee before making decisions on the offer. The Independent Committee
is promising further communication with shareholders before the offer closes.
“The Independent Committee expects that the matters it has highlighted in its letter to shareholders will become clearer
in the next two to three weeks. The Committee will provide further advice to shareholders no later than seven days
before the offer closes” said Mr Bayly.
“The factors highlighted include the substantial synergy benefits available to a company acquiring W, which are not fully priced in the offer, the potential for the emergence of alternative proposals or competitive bids
before the current offer closes, the fact that the offer is presently conditional on achieving 90% acceptances, and the
fact that H Limited and interests associated with the Cushing family have not yet decided whether to accept or reject the Wrightson
offer in relation to their holdings.
Grant Samuel & Associates Limited, the independent adviser appointed by W, assesses the valuation range of W at $3.92 to $4.35 per share. The Wrightson offer is either $4.70 in cash, or one Wrightson share plus $2.70 cash. Grant
Samuel concludes that the offer is fair in terms of the stand-alone value of W’s business and its assets, but points out that it recognises only around 25% of the value of acquisition synergy
benefits, based on a preliminary assessment by W management. Grant Samuel also comments that W’s size and operational and geographic spread make it a strategically attractive asset.
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“The Independent Committee believes that the magnitude of W’s strategic and synergy benefits are such that there is clear potential for a higher offer from Wrightson or another
bidder,” Mr Bayly says.
W’s Independent Committee comprises John Bayly, Roger Bonifant, Murray Gough, Andrew Train and Hamish Williams. The other
W directors, David Cushing, Sir Selwyn Cushing and Brian Martin, are not considered independent due to their association
with H Limited, a substantial security holder of W