Brazilian meat processor JBS is offering a 4.5 per cent premium to buy a controlling stake in industrial automation manufacturer Scott Technology as part of a capital raising to cut the Dunedin company's debt levels.
JBS Australia, an existing Scott customer, has put forward an offer to merge with Scott via a scheme of arrangement, which requires 75 per cent shareholder approval, where it would buy 10 million shares at $1.39 apiece and offer to pay existing investors the same price.
That would be followed by a one-for-eight non-renounceable rights issue at $1.39 for shareholders who didn't want to be diluted, then a further placement to give JBS 50.1 per cent of the firm. That's a 4.5 per cent premium to the $1.33 price the shares traded at before the announcement.
Chairman Stuart McLauchlan and chief executive Chris Hopkins said Scott had previously told shareholders it was considering a capital raising to cut debt after recent business acquisitions and to provide working capital to fund further growth.
"After considering the company's size and level of institutional interest in Scott, the company believed our growth aspirations would be best achieved with a relevant industry-based cornerstone investor."
