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.[1]
Over the four months since that announcement, the Independent Directors of Thakral[2] (“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[3] (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)[4], 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.
Next Steps
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
-Ends-
[1] Capitalised terms not defined in this announcement take the meaning given in the replacement bidder's statement issued in respect of the Offer and dated 18 June 2012 ("Bidder's Statement").
[2] Messrs A E Harris, Hugh Keller and Lim Swe Guan.
[3] For each partly paid Thakral Security, the Offer Price will also be increased to $0.81 cash less any amount unpaid as at the date the Offer is accepted. The Offer Price remains subject to the other terms and conditions set out in section 8 of the Bidder's Statement including the right of Bidco to reduce the Offer Price in respect of any dividends, distributions or other Rights arising in respect of the Thakral Securities. Bidco reserves the right to vary the terms of the Offer in any manner permitted by the Corporations Act.
[4] As noted in Thakral’s ASX announcement dated 14 August 2012, the Receivers have announced an intention to recommend that the Security Trustee accept the Secured Stake into the Offer subject to any third party superior offer being announced that the Receivers determine to be superior to the Offer and the obligations to which any relevant party is subject under section 420A of the Corporations Act. The Receivers have also been directed to accept the Offer in respect of the partly paid Thakral Securities which they control if they recommend that the Security Trustee accepts the Offer. The Receivers have confirmed that they will recommend that the Security Trustee lodge acceptance instructions for the Secured Stake into the Acceptance Facility.
Appendix 1 – Key terms of Acceptance Facility
The following is a summary of the key terms of the Acceptance Facility. Thakral Securityholders should refer to the full terms as and when they are received.
(a) UBS Securities Australia Limited (AFSL 231098) will be appointed Facility Agent by Bidco.
(b) Thakral Securityholders may lodge acceptance instructions with the Facility Agent, in the form of:
(i) a duly completed Acceptance Form in respect of their Thakral Securities; and/or
(ii) where a Thakral Securityholder holds Thakral Securities as custodian for another person (the Beneficial Holder), a direction from the Beneficial Holder to the Thakral Securityholder to accept the Offer (Custodian Direction) (alternatively, such Custodian Direction can be lodged with the Facility Agent by the Beneficial Holder instead of the custodian who is the registered holder of the relevant Thakral Securities),
(together, Acceptance Instructions).
(c) The Facility Agent will hold Acceptance Instructions as acceptance collection agent only and will not acquire any Relevant Interest in the Thakral Securities which are the subject of the Acceptance Instructions.
(d) Acceptance Instructions lodged with the Facility Agent will demonstrate the intention of the relevant Thakral Securityholder to accept the Offer if 90% Acceptances are obtained – however they will not constitute acceptances of the Offer while they are held by the Facility Agent.
(e) As soon as is practicable after Bidco becomes aware and is satisfied (acting reasonably) that the aggregate of:
(i) the number of Thakral Securities in respect of which Bidco has received valid acceptances of the Offer; and
(ii) the number of Thakral Securities in respect of which Acceptance Instructions have been received, as advised by the Facility Agent to Bidco, provided that:
(A) where the Acceptance Instructions are in the form of Acceptance Forms, the Thakral Securities to which the Acceptance Forms relate remain held by the Thakral Securityholders who provide such Acceptance Instructions;
(B) where the Acceptance Instructions are in the form of Custodian Directions, the Thakral Securities to which the Custodian Directions relate remain held by the relevant custodians; and
(C) Bidco is otherwise satisfied (acting reasonably) that, having regard to the form and content of the Acceptance Instructions, if the Acceptance Instructions were released and delivered as contemplated by paragraph (f) below and the Acceptance Forms processed by the Registry and/or the relevant custodian acted in accordance with the Custodian Directions (as applicable), Bidco would receive valid acceptances of the Offer in respect of the Thakral Securities to which the Acceptance Instructions relate,
equals or exceeds 90% of the number of Thakral Securities on issue at that time, Bidco will provide written notice of that occurrence to the Facility Agent (the Confirmation Notice).
(f) By lodging Acceptance Instructions with the Facility Agent and not withdrawing those Acceptance Instructions, Thakral Securityholders and (as the case may be) Beneficial Holders will have directed the Facility Agent to deliver those Acceptance Instructions in accordance with paragraph (g) following the Facility Agent’s receipt of the Confirmation Notice.
(g) As soon as is reasonably practicable following receipt of the Confirmation Notice, the Facility Agent will deliver or procure the delivery of (as the case may be):
(i) Acceptance Forms to Link Market Services Limited, as acceptances of the Offer; and
(ii) the Custodian Directions to the relevant custodians.
(h) Until the Facility Agent receives the Confirmation Notice from Bidco, Thakral Securityholders and (as the case may be) Beneficial Holders will retain all rights and full control over Thakral Securities which are the subject of their Acceptance Instructions and, in particular, will be able to withdraw their Acceptance Instructions simply by notifying the Facility Agent, provided such
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