KEY POINTS:
The independent directors of Southern Capital today recommended shareholders accept the takeover offer of Lynwalsh Holdings, a company registered by Southern Capital directors Stuart McKinlay and Trevor Scott.
The offer for all of Southern is at $1.197 per share.
The independent directors appointed Simmons Corporate Finance as advisor, which valued Southern at between $1.170 and $1.211 per share.
Chairman of the independent directors, Graeme Wong, said Lynwalsh's bid was above the valuation midpoint of $1.191.
That includes an estimate for an earn-out payment from the sale of Hirequip, which may be paid irrespective of the outcome of the offer.
The independent directors, who said they themselves intended to accept the offer, said that if the offer fails, Southern's share price may decline.
Southern Capital, formerly Hirequip until it sold its hire business last year, this month reported a net profit after tax of $57.4 million for the December half year.
Hirequip fetched $166.9 million and an earn-out deal could add $7.5m to that price.
Southern, which essentially liquidated before the takeover offer, also sold its 21.75 per cent shareholding in Tasman Farms for $9.6m and achieved final settlement of Pegasus Bay Town for $14m.
Southern shares last traded at $1.11. They have traded between 81c and $1.30 in the last year.
NZPA
