Sanford directors reject IWL offer
Sanford’s independent directors have unanimously recommended that shareholders rejectIWL’s buyout offer, following the delivery of a report by consulting groupKPMG.
The KPMG report stated that IWL’s offer is “not fair and not reasonable”, with Sanford shares assessed to be worth between 31 cents and 39 cents.
IWL has offered Sanford shareholders 19 cents per share in a cash offer, or one IWL ordinary share for each Sanford share held. KPMG foresees that IWL shares will trade at 18.5 cents in the immediate future.
The report also says that since IWL announced its buyout bid last month, a number of alternative parties have entered into discussions with Sanford with a view to providing “alternative opportunities that may deliver superior value to Sanford shareholders”. However none of these parties have tendered a firm proposal or committed to an alternative bid at this stage.
Other concerns held by the independent directors include the uncertainty of IWL’s future share price, that the offer does not reflect Sanford’s underlying value and does not include a suitable premium for control of Sanford, and that the shareholder offer would transfer value from Sanford shareholders to current IWL shareholders.
The Sanford board consists of four members - Clive Hall, Steven Goh, Robert McKay and Otto Buttula.
Buttula, the chief executive of IWL, was required to abstain from the process of making the recommendation to shareholders.
At the close of business on 20 February, only 1.65 per cent of Sanford shareholders had accepted the IWL offer, bringing IWL’s total holding in Sanford to 21.55 per cent. The IWL offer is due to close on 21 March 2003.
The IWL takeover has so far been stricken with controversy, with a group of Sanford shareholders mounting an unsuccessful Supreme Court action in October to stop Buttula taking up his seat on the board.
The directors thought to be his strongest opponents, Hadley Bodinner and Joe McKay, were voted off the Sanford board in December.
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