KEY POINTS:
The terms of the merger between electronic payment companies Provenco Group and Cadmus Technology have been adjusted in light of market changes to their share prices.
Cadmus shareholders will get one share in the merged company for every 4.2 shares they hold, a slightly better deal compared to 4.6 shares previously announced in October. Provenco shareholders will still get one share in the yet-to-be-named new company for each existing share they hold.
Rick Christie, chairman of the proposed board, believed the new ratio to represent a fair and equitable deal for shareholders of both companies.
"The merger ratio has been altered to reflect the trading of each company in the four months since the proposed merger was announced.
"With the passage of time things do change for both companies so we felt we needed to have the ratio reset to reflect that."
In its draft report to both companies, independent expert Grant Samuel indicated that it considered the ratio to be fair to shareholders. It was also of the opinion that shareholders in both companies were likely to be better off if the merger was implemented than if not.
The proposed merger was cleared by the Commerce Commission on February 7, having been satisfied that it would not substantially lessen competition.
Christie said the next steps would be to finalise the merger proposal documentation for shareholders of both companies. This was expected to be issued in mid-March with shareholder meetings to discuss the proposal likely in early April.
The boards were very enthusiastic, he said.
"The more we look at it, the more sense it makes. We are a long way down the track in terms of planning what can result from it, and I think it will be very good for both companies. I'm more certain about that now than I was last year."
The name of the proposed merged entity has yet to be decided but would remain listed on the NZX.
Provenco's shares closed at 39c yesterday, down 1c, while Cadmus closed at 10.5c, up half a cent.
* Cadmus has posted a half-year loss of $671,000, reflecting restructuring costs and costs related to the proposed merger. But overall results were in line with plans. Operating surplus was up 13.6 per cent to $1.7 million, while operating revenue was flat at $14.6 million.
PROVENCO
* Supplies eftpos payment and retail technology in New Zealand.
* Its Vantex Technology subsidiary distributes point of sale, bar-coding, mobile and wireless technology in Asia Pacific, accounting for about 60 per cent of revenue.
* Forecourt technology, including pump, shop and back-room systems, accounts for up to 25 per cent of revenue.
* Its technology is used in more than 6000 service stations in 23 countries.
CADMUS
* Designs, develops and manufactures eftpos terminals.
* New Zealand clients include the Bank of New Zealand and TAB.
* Provider of a multimillion-dollar electronic payment solution for one of Australia's biggest taxi companies.
* Its terminals are also used in about half of Singapore's taxi fleet.
