Empire gets largest Vital shareholder to support 50.01% takeover offer

Simon and Paula Herbert.

The largest shareholder in NZX-listed fibre business Vital is backing Empire Technology’s $8 million takeover offer for 50.01% of the shares, according to the man leading the deal.

Empire director Simon Herbert said Vital’s single largest shareholder Asset Management Partners, which holds 8% of the company, had reached agreement and accepted Vital’s offered price.

“We have given a substantial product holding notice to the NZX that we have reached agreement with Asset Management Partners, that they will accept our partial takeover offer at the price we have proposed, for their full 8% shareholding.

“We hope this transaction will give Vital shareholders confidence that the price offered by us is fair, well above recent market price for shares in the company,” Herbert said.

But Vital’s board has said Empire’s offer isn’t good enough..

Herbert said Empire had now made a formal takeover offer to be made to shareholders on September 2 because Herbert said the Takeovers Code required 14 days notice.

Vital’s board said last week it recommended shareholders did not take any action until the board gave further guidance.

The company is due to deliver its annual result next Tuesday and says it will “address all shareholder questions on this matter then”.

Herbert said his offer had been well above the price Vital was trading at and referred to Vital board chairman John McMahon.

The Vital board chair last Friday gave notice to the market that Empire’s proposed bid of 37.5 cents per share materially undervalues Vital.

But Herbert said today: “That offer price is more than 50% higher than the weighted average price at which the stock has traded over the last 12 months. The board hasn’t given any public indication of what it consider to be fair value.”

Last week, Empire Capital Trust said it had approached Vital to advise that an affiliated entity intended to make a partial takeover offer for 50.01% at 37c a share.

“Empire believes the offer would be a compelling opportunity for shareholders to realise significant value for their investment in Vital, with the offer price,” Empire said in a statement then.

Last week, Vital’s board said the offer was not good enough.

The board’s position was that Empire’s price sat well below a level at which it would be prepared to grant access to undertake due diligence.

Vital has been trading up since the takeover offer was announced.

Anne Gibson has been the Herald’s property editor for 24 years, written books and covered property extensively here and overseas.