KEY POINTS:
Australian company OneSteel has launched a takeover bid for Lower Hutt-based Steel & Tube holdings, which describes itself as this country's largest distributor of steel and allied products.
OneSteel, which already owns 50.27 per cent of Steel & Tube, said today it was offering $4 cash for each of the remaining shares. Steel & Tube shares closed at $3 on Friday.
OneSteel said it was seeking a unanimous recommendation from the Steel & Tube board in the absence of a superior proposal.
Steel & Tube's board had indicated it intending obtaining an independent adviser's report before making a formal recommendation to shareholders.
The offer price was a 17 per cent premium to the volume weighted average price of Steel & Tube shares traded on the NZX in the month to the end of September, OneSteel said.
It was also a 31 per cent premium to the volume-weighted average price during the three months to last Friday.
The offer valued Steel & Tube at an enterprise value of $437.9 million.
OneSteel managing director Geoff Plummer said the offer would allow OneSteel to simplify its corporate structure and efficiently manage the Steel & Tube business as part of the OneSteel group.
OneSteel intended to retain the Steel & Tube brand and increase its business.
The offer is subject to limited conditions, including OneSteel receiving enough acceptances to increase its shareholding to at least 90 per cent, and Overseas Investment Office approval.
OneSteel chairman Peter Smedley said the opportunity for Steel & Tube shareholders to receive cash was attractive given the illiquid market for Steel & Tube shares and current economic uncertainty and market volatility.
OneSteel said that importantly, the offer was not subject to it raising finance.
- NZPA
