This article is from the Australian Property Journal archive
MAJOR Eureka Group shareholder, Ben Cottle’s Filetron, and the board of directors continue to oppose Aspen Group’s takeover offer, which Eureka maintains undervalues the affordable accommodation provider.
Filetron holds 19.44% of Eureka’s shares and the board a collective 2.3%.
“Aspen will not be able to achieve the 90% threshold needed to compulsorily acquire all Eureka shares during the offer period. This means that the purported merger benefits, including estimated synergies, claimed by Aspen will not be attainable,” Eureka said in an ASX statement.
Cottle, founder and non-executive chairman of construction business FDC Group, was an investor in Eureka director Greg Paramor’s Folkestone, which was bought by Charter Hall five years ago.
Eureka said it “continues to conclude that the offer is inadequate, materially undervalues Eureka shares and is not in the best interests of Eureka shareholders”.
“Shareholders who accept the offer will be receiving Aspen securities with an implied value materially LESS than the current price of Eureka shares.”
Based on the last closing price of Aspen securities prior to the date of this announcement, the implied value of the offer is $0.4502 per Eureka share, a 15.1% discount to the current price at which Eureka shares trade on the ASX of $0.5303, the board said.
The all-scrip bid, which values Eureka at $166 million, proposes a merger ratio of 0.26 Aspen securities per Eureka share. Eureka said the bidder’s statement contained “misleading statements and material omissions”.
