Kerry Stokes has dangled a bigger carrot in front of fellow Caterpillar franchisee Dale Elphinstone in the hope of snaring National Hire. Seven Group currently has more than 67 per cent of National Hire but without Elphinstone’s 21.9 per cent stake Stokes can never move to the stage of compulsory acquisition.
The new offer is like the last two-tiered proposal. There’s $3.35 on the table for smaller shareholders compared to the original $3 offer, but that could jump to $3.75 if Elphinstone throws his share in. At $3.75 the target has a value of $557 million, of which Elphinstone would collect $122 million.
The statement from the target indicated that Elphinstone hadn’t accepted the offer yet but the other two independent directors, Stephen Donnelley and Clive Isenberg, have upped their recommendation from ‘accept if it’s in your interest’ to ‘accept’. As their previous recommendation had been predicated on the notion that Elphinstone might refuse to play ball with Stokes and shareholders who sold could be left with $3, the new stance implies one of two things. Either Donnelley and Isenberg believe $3.25 isn’t a bad price or the risk of Elphinstone declining to take the new offer has been reduced.
NHR Price at posting:
$3.01 Sentiment: Hold Disclosure: Not Held
