- 01G8 in exclusive talks on A$0.26/share bid.
- 02Offer implies 160% premium.
- 03Non-binding; due diligence and approvals pending.
G8 Education (ASX: GEM) has entered exclusive negotiations with Majority Capital Partners over a non-binding proposal to acquire all its shares for A$0.26 each through a scheme of arrangement.
The indicative price represents a 160% premium to G8’s closing share price of A$0.10 on 11 November, immediately before the proposed transaction became public.
Majority Capital Partners will conduct confirmatory due diligence under a transaction process deed allowing up to six weeks of exclusivity as the parties consider a binding agreement.
G8’s board has agreed to progress discussions but cautioned that neither party is obliged to proceed and there is no certainty of a completed transaction.
Offer Terms and Funding
The proposal would give shareholders the option to take an as-yet-undetermined portion of their consideration in shares of a new holding company, with the balance paid in cash.
Any cash dividends declared or paid by G8 after the process deed date would be deducted from the proposed A$0.26-per-share consideration.
The indicative price is 177% above G8’s one-month volume-weighted average share price of A$0.094 and 143% above its three-month VWAP of A$0.107, both measured to 11 November.
Majority Capital Partners has obtained bank highly confident letters and equity commitment letters that together cover the full consideration contemplated by its proposal.
Exclusive Negotiation Framework
G8 provided the investment manager with limited non-public information during preliminary due diligence over recent weeks before deciding to permit a more detailed review.
The exclusivity period begins when the bidder receives access to the due diligence data room and can run for six weeks, with the first three weeks subject to stricter restrictions on competing discussions.
The arrangements include restrictions on soliciting alternative offers, engaging with rival bidders, and providing competing due diligence access, together with notification requirements and matching rights.
After the initial three weeks, specified fiduciary exceptions may permit the board to respond to a potentially superior proposal if the relevant legal and financial advice supports that course.
Exclusivity can be extended by five business days if Majority Capital Partners confirms near the end of the period that it has substantially completed its review and is prepared to proceed on the proposed terms.
Indicative Director Support
Any binding transaction remains conditional on satisfactory due diligence, agreement on definitive documentation, and approval of the final terms by Majority Capital Partners’ investment committee.
The bidder must also obtain binding financing commitments, while G8’s directors would need to recommend the transaction unanimously in the absence of a superior offer.
That recommendation would depend on an independent expert continuing to conclude that the proposed acquisition is in shareholders’ best interests.
Directors have indicated they would support the scheme and vote any shares they control in its favour if an acceptable binding agreement preserves consideration of at least A$0.26 per share, subject to the stated qualifications.
G8 has appointed Barrenjoey as financial adviser and Allens as legal adviser, while Majority Capital Partners is advised by Ashurst Perkins Coie, Horizon Nexus Partners, and PwC.
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