(Alliance News) - Taylor Maritime Investment Ltd has made a voluntary conditional cash offer for all shares it does not already own in Grindrod Shipping Holdings Ltd, the two companies announced in a joint statement on Wednesday.
The proposed acquisition values the Singapore-based shipping firm at USD506 million. In terms of the deal, Grindrod shareholders who have validly tendered their shares would receive USD26.00 per share, comprising USD21.00 in cash and the special dividend of USD5.
If the conditions of the offer are not satisfied, no special dividend will be paid.
The offer represents a 11% premium to Grindrod Shipping's closing price on Tuesday on the JSE and amounts a 27% premium to the last traded share price on August 26, being the last full day of trading on Nasdaq when the two companies entered into a letter of intent regarding the offer.
In Johannesburg, Grindrod Shipping shares were up 3.0% at ZAR441.00 on Wednesday late morning. But Taylor Maritime was trading flat in London at 106.00 pence.
Grindrod Shipping directors have given preliminary recommendation of the offer by Taylor Maritime, which made a non-binding indicative proposal to acquire Grindrod Shipping on August 29.
Taylor Maritime already owns a 27% stake in Grindrod Shipping. The company has received irrevocable commitments of 1.9 million shares, representing 10%. It has not received any irrevocable commitments from any other party to accept or reject the offer as at Tuesday.
In a separate statement on Wednesday, Taylor Maritime proposed changes to its investment policy to facilitate the Grindrod Shipping acquisition.
The changes, if approved by Taylor Maritime shareholders, will enable the company to invest in a majority stake in a shipping company up to 40% of gross assets on an exceptional basis, with a commitment to bring the investment exposure down to a maximum of 30% of gross assets within 18 months through a combination of vessel sales and group restructuring.
Taylor Maritime also proposed to increase its current gearing limit within its investment policy. Such borrowing limit will be increased to 40% of gross assets on an exceptional basis, with a commitment to bring gearing back within the current limit of 25% of gross assets within a maximum of 18 months through a combination of vessel sales and cash generation.
By Artwell Dlamini; artwelldlamini@alliancenews.com
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Taylor Maritim (TMI)
Taylor Maritim (TMIP)