Graincorp abandons bid
Following a significant share price slump, Graincorp withdraws its bid for agri-products company Ridley Corp.
Grain handling company Graincorp has effectively abandoned its pursuit of agri-products and salt company Ridley Corp following the dramatic slump in its own share since announcing its proposed merger in May.
Graincorp, which received advice from Lazard Carnegie Wylie, said it recognised the one-for-nine stock offer was potentially unattractive for Ridley investors at the current price, and it would let the bid lapse if it did not reach its 90 per cent threshold by August 26.
The grain company's share price has slumped 42 per cent since it announced the bid, before making a small recovery after today's announcement.
At the time of its bid, its $12.48 share price valued Ridley at $1.39 a share. At its current level of around $8.20 (and that's after a 6.5 per cent gain today), the bid values Ridley at just 81c. Ridley shares last traded at $1.10.
The Graincorp bidder's statement noted Lazard Carnegie Wylie was to receive estimated fees of around $4 million for its advice on the takeover, but it is not clear whether this is a fixed fee or had a success-fee component.
Ridley is receiving advice from Gresham Partners, which with CIBC World Partners is seeking buyers for its majority stake in Ridley Inc, which is worth around $80 million.
Mark Carnegie and John Wylie, directors of the corporate advisory and private equity firm Lazard Carnegie Wylie, are investors in Business Spectator
Graincorp, which received advice from Lazard Carnegie Wylie, said it recognised the one-for-nine stock offer was potentially unattractive for Ridley investors at the current price, and it would let the bid lapse if it did not reach its 90 per cent threshold by August 26.
The grain company's share price has slumped 42 per cent since it announced the bid, before making a small recovery after today's announcement.
At the time of its bid, its $12.48 share price valued Ridley at $1.39 a share. At its current level of around $8.20 (and that's after a 6.5 per cent gain today), the bid values Ridley at just 81c. Ridley shares last traded at $1.10.
The Graincorp bidder's statement noted Lazard Carnegie Wylie was to receive estimated fees of around $4 million for its advice on the takeover, but it is not clear whether this is a fixed fee or had a success-fee component.
Ridley is receiving advice from Gresham Partners, which with CIBC World Partners is seeking buyers for its majority stake in Ridley Inc, which is worth around $80 million.
Mark Carnegie and John Wylie, directors of the corporate advisory and private equity firm Lazard Carnegie Wylie, are investors in Business Spectator
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