Trading of Tegel shares suspended in NZ, Australia

AUCKLAND: Tegel Group Holdings will officially leave the NZX and ASX later this month once Bounty Fresh Foods finishes mopping up minority shareholders.

Trading of the shares was suspended at the close of trading yesterday to let the Philippines poultry company acquire the remaining shares. The stock will be delisted on October 23.

Bounty crossed the 90% threshold needed for a compulsory takeover of Tegel in August, offering $1.23 a share, valuing the Kiwi poultry group at $437.8 million. The Philippines company declared the takeover unconditional last month after the Overseas Investment Office approved the deal.

The takeover bid got the blessing of Tegel’s board in June, which accepted the price was fair and that Bounty’s majority shareholding would create uncertainty for minority investors. Bounty secured an initial 45% stake from Affinity Equity Partners, worth about $197 million, and by the time it formally lodged its takeover in May it had already secured another 13%.

The $1.23 offer was a premium to the 82c the shares traded at before Bounty’s interest emerged. However, the stock had struggled since its 2016 initial public offering when it was sold at $1.55, at the lower end of the $1.50to$2.50 range it was seeking.

Affinity bought the poultry business in 2011 from Pacific Equity Partners and ANZ Capital, paying $256.1 million in cash and assuming $342.7 million of debt. The chicken company was generating annual revenue of $470.8 million at the time and that grew to $615.4 million in the 2018 financial year.

Tegel’s public offer raised about $284 million, of which $132 million was earmarked to repay bank debt. About $129 million covered the redemption of existing redeemable shares, $23 million covered the IPO costs, and just $1.2 million was retained by Tegel. — BusinessDesk