Close the Loop Limited Considers Acquisition Proposal from Adamantem Capital
CLG (CLG) Share Update November 2024 Monday 18th
Close the Loop Receives Acquisition Proposal from Adamantem CapitalClose the Loop Limited, a global leader in the circular economy, has announced the receipt of an indicative, non-binding, and conditional proposal from Adamantem Capital to acquire 100% of its shares.
Instant Summary:
- Adamantem Capital proposes to acquire Close the Loop at $0.27 per share.
- The offer represents a 49% premium to the 30-day VWAP as of 15 November 2024.
- Shareholders can opt for cash, scrip, or a combination, with conditions on scrip take-up.
- Close the Loop's board recommends progressing with the proposal.
- Exclusivity period for due diligence and negotiation set for 20 business days.
Proposal Details
Close the Loop Limited has received a proposal from Adamantem Capital to acquire all of its shares at a price of $0.27 per share. This proposal is non-binding and conditional, requiring further due diligence and negotiation of a Scheme Implementation Deed (SID).
The offer presents a significant premium of 49% over the company's 30-day volume-weighted average price (VWAP) as of 15 November 2024. Shareholders have the option to receive their consideration in cash, scrip in the acquiring entity, or a combination of both. However, the scrip option is subject to a minimum take-up level and may be scaled back if the total scrip consideration exceeds 45% of all outstanding shares.
Board's Decision and Next Steps
After consulting with financial and legal advisers, the board of Close the Loop has decided it is in the best interests of shareholders to proceed with the proposal. The board has granted Adamantem an exclusivity period of 20 business days to conduct due diligence and negotiate the SID. This period may be extended by another 20 business days if necessary.
The board intends to recommend the proposal to shareholders, provided the final offer is at least $0.27 per share, there is no superior proposal, and an independent expert deems the transaction to be in the best interests of shareholders.
Advisers and Market Communication
Close the Loop has appointed MA Moelis Australia and Thomson Geer as its financial and legal advisers, respectively, for this proposal. The company has committed to keeping the market informed in line with its continuous disclosure obligations.
The proposal from Adamantem Capital is likely to have a positive impact on Close the Loop's stock price due to the substantial premium offered. This acquisition could enhance the company's growth prospects and align with its strategic goals in the circular economy sector.
Investor Reaction:
Analysts are expected to view the proposal favorably, given the premium over the current share price and the strategic fit with Adamantem Capital's investment focus. However, the outcome will depend on the completion of due diligence and any potential competing offers.
Conclusion:
Investors should watch for further announcements regarding the due diligence process and the finalization of the Scheme Implementation Deed. The board's recommendation and any competing proposals will be crucial in determining the future of Close the Loop.