In December 2011 an affiliate of Brookfield Office Properties acquired an interest in debentures secured by a 39% interest in Thakral Holdings Group. On April 19, an affiliate of Brookfield announced its intention to make an offer for all the outstanding shares of Thakral at $0.70 per share and subsequently on August 21, announced a conditional increase to its offer to $0.81 per share. The press release is below.
Conditional Increase in Brookfield’s Offer for Thakral to $0.81 cash per fully paid Thakral Security
Thakral Independent Directors unanimously recommend that Thakral Securityholders lodge acceptance instructions into the Acceptance Facility for the Conditional Increase
21 August 2012
Conditional Increase in Brookfield’s Offer to $0.81 cash per fully paid Thakral Security
BidCo 1 Pty Limited ("Bidco"), an affiliate of Brookfield Asset Management Inc. (“Brookfield”), announced an intention to make a takeover bid for Thakral Holdings Group (“Thakral”) of $0.70 cash per fully paid security (the “Offer”) on 19 April 2012.
Over the four months since that announcement, the Independent Directors of Thakral (“Independent Directors”) and their advisers have conducted an extensive process to solicit alternate proposals (the “Process”). A number of parties have engaged in detailed discussions and have undertaken significant due diligence on Thakral as part of the Process. As announced on 13 July 2012, Brookfield was also brought into the Process and provided access to due diligence information.
The outcome of the Process is that Bidco has today stated that its Offer Price will be increased to $0.81 cash per fully paid Thakral Security (the “Conditional Increase”) if Bidco obtains:
- valid acceptances of the Offer; and/or
- acceptance instructions into an acceptance facility (the “Acceptance Facility”) which would (or if Bidco, acting reasonably, is satisfied would) if released and processed result in valid acceptances of the Offer,
which in aggregate represent at least 90% of the issued Thakral Securities ("90% Acceptances").
In addition, Bidco has today declared the Offer to be free of all defeating conditions. Bidco also announces its intention to extend the Offer Period to end at 7pm on Tuesday, 11 September 2012.
The Conditional Increase is the best proposal received as a result of the Process. The Conditional Increase of the Offer Price to $0.81 cash per fully paid Thakral Security represents a 16% premium over the current Offer Price of $0.70 and a substantial premium of 40% to Thakral’s volume weighted average trading price in the three months period prior to the announcement of the Offer on 19 April 2012.
Recommendations and Securityholder statements of support
The Independent Directors recommend the Conditional Increase of $0.81 cash per fully paid Thakral Security, subject to no superior proposal.
Accordingly, each of the Independent Directors:
· recommends that Thakral Securityholders lodge acceptance instructions into the Acceptance Facility with respect to their securityholdings as soon as the Acceptance Facility has been established and do not withdraw those instructions; and
· intends to provide acceptance instructions, or procure that acceptance instructions are provided, into the Acceptance Facility, in respect of Thakral Securities that he owns or controls or otherwise has a Relevant Interest in and will not withdraw those instructions,
subject in each case to:
- there being no superior proposal in relation to Thakral; and
- the Offer Period not being extended beyond 31 October 2012.
Brookfield looks forward to working with Thakral to encourage the achievement of 90% Acceptances such that Thakral Securityholders can benefit from the Conditional Increase of the Offer Price to $0.81 cash per fully paid Thakral Security.
The Independent Expert, Grant Samuel, has opined that the Brookfield Offer of $0.70 per stapled security remains neither fair nor reasonable. However, the Brookfield Offer with the Conditional Increase to $0.81 is reasonable, in the absence of a superior offer, although not fair. A copy of the Independent Expert’s supplementary letter accompanies this announcement as Appendix 2.
Significant Thakral Securityholders and the Receivers who collectively represent approximately 69.4% of the issued Thakral Securities have confirmed to Thakral their intention to support the Conditional Increase. They have each respectively indicated to Thakral that they intend to lodge or procure the lodgement of acceptance instructions into the Acceptance Facility in respect of the Thakral Securities they hold or control (or, in the case of the Receivers, recommend that the Security Trustee lodge an acceptance instruction for the Secured Stake into the Acceptance Facility), as soon as possible and do not intend to withdraw those instructions unless:
- an alternative proposal for Thakral is announced which the relevant securityholder considers is superior to the Offer;
- the Offer Period is extended beyond 31 October 2012; or
- they accept into the Offer,
and, in the case of the Receivers, subject to any obligations to which any relevant party is subject under section 420A of the Corporations Act.
Implementation of the Conditional Increase
Thakral and Bidco have entered into an Implementation Deed in respect of the Conditional Increase. The Implementation Deed includes customary deal protection mechanisms including ‘no shop’ and ‘no talk’ restrictions. A copy of the Implementation Deed accompanies this announcement as Appendix 3.
Bidco will establish an Acceptance Facility under which all Thakral Securityholders can lodge acceptance instructions which will only be released and processed if Bidco obtains 90% Acceptances. The key terms of the Acceptance Facility are summarised in Appendix 1 of this announcement.
Full terms and conditions of the Acceptance Facility, together with an invitation to participate in the Acceptance Facility, will be sent to Thakral Securityholders shortly.
Options for Thakral Securityholders
Once the Acceptance Facility is established, there will be several options available to Thakral Securityholders who have not already accepted the Offer, including:
i) Conditional acceptance into the $0.81 per fully paid Thakral Security Acceptance Facility – Recommended by the Independent Directors;
ii) Acceptance directly into the $0.70 per fully paid Thakral Security Offer – NOT recommended by the Independent Directors;
iii) Continue to hold Thakral Securities; and
iv) Sell Thakral Securities on the ASX.
These options will be discussed in more detail in a Supplementary Bidder’s Statement and Supplementary Target’s Statement that will be sent to Thakral Securityholders shortly.
Thakral Securityholders will shortly receive a Supplementary Bidder’s Statement from Bidco. This will include full details of the Acceptance Facility.
Thakral Securityholders will also receive a Supplementary Target’s Statement from the Independent Directors of Thakral.
Thakral Securityholders should not take any action until they receive these documents.
Attachments (in pdf attachment at right of page):
Appendix 1 – Summary of key terms of Acceptance Facility
Appendix 2 – Supplementary Independent Expert’s Letter
Appendix 3 – Implementation Deed