Durante Holdings extends offer to Michael Hill International

Durante Holdings Pty Limited (Durante) is extending the closing date of its partial takeover offer for 10.03 million shares in Michael Hill International Limited (MHI) until the end of 28 February 2011.

Durante has also received Overseas Investment Office approval to proceed with the partial takeover offer. This consent satisfies a key condition of the offer.

The offer seeks to increase Durante’s holding in MHI to 50.2 per cent from the 47.63 per cent already held on behalf of interests associated with MHI chairman Sir Michael Hill.

Durante director Emma Hill says it is appropriate to extend the closing date to allow MHI shareholders to consider the 90 cents a share offer after receiving the Target Company Statement and Independent Advisor’s Report, due to be sent this week.

“Our confidence that sufficient shareholders will accept our offer has been confirmed by the acceptances already received. As of 3.30pm today we are just over 67% to our minimum acceptance target of 8.9 million shares with ACC and New Zealand Super Fund accepting the offer for 3 million shares and 1 million shares respectively under pre-bid agreements, and other shareholders holding more than 2 million shares also having accepted the offer.”

Durante wants to move out of the “no fly zone” (between 20 and 50 per cent), in which its holding now falls where no further shares can be acquired without making a Takeover Code compliant offer to all shareholders.

“The acquisition of approximately 2.6% of the issued capital represents a small percentage of shares in MHI and will not produce any effective change of control of the Company but will give the family interests flexibility to acquire additional shares in compliance with the Takeovers Code should there be attractive opportunities to do so.”

“We are pleased to be offering existing shareholders an opportunity to realise a premium price for part of their holding while signaling the family’s confidence in the future of the Company.”

ACC and New Zealand Super Fund have both agreed to amend their pre-bid agreements to allow for the extension of the closing date and the consequent change in settlement to 4 March 2011. No other amendments have been made to the agreements.

“The fact that two of MHI’s sophisticated and institutional shareholders are committed to the offer in the knowledge that 90 cents represents the highest price the Company’s shares have traded in the two years prior to the offer being launched in December 2010 is significant and confirms that the offer is fairly priced.” The offer price is a premium of 10.8 % to the volume weighted average price the shares were trading at over the 30 days immediately prior to the offer being notified. The offer price also values the Company on a higher earnings multiple than most other comparable Australasian specialty retail stocks.

The offer gives all shareholders an opportunity to receive a premium for at least five per cent of their holding without any deduction for brokerage costs.

“For all these reasons, we believe, the offer is particularly attractive to all shareholders.”

ENDS

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