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24 Mar 2018 23:12
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  •   Home > News > Business

    Trilogy shareholders back takeover

    Trilogy is set to go private as shareholders back Citic's $211 million takeover, though regulatory hurdle remain.

    14 March 2018

    Trilogy International is set to de-list from NZX with shareholders backing a $211 million takeover from China's Citic Capital Partners at a special meeting.

    Almost 53 million shares, amounting to 99 per cent support, were cast in favour of a resolution for a scheme of arrangement with Citic at the meeting on Wednesday.

    The Chinese investment firm pay $2.90 a share to take over the listed skincare products and scented candle maker.

    The scheme structure required at least 75 per cent support, and half the firm's voting rights to be cast, which was met with almost 74 per cent.

    Trilogy's directors backed the offer, which fell within independent adviser Grant Samuel's valuation range of between $2.59 and $2.94 per share, and was 28 per cent higher than the $2.26 price the shares were trading at before the offer.

    The independent adviser report said this was close to the average premium offered in successful takeovers of listed companies. The shares rose 1.1 per cent to $2.80 Wednesday.

    "In recommending the scheme your directors have taken into account that whilst TIL is well positioned to deliver growth in earnings, delivering this growth will take some time and involves execution risks," said chair Grant Baker, whose Business Bakery unit threw its 31 per cent stake behind the offer.

    "Throughout this process no superior proposal has emerged that the directors believe is more favourable to shareholders than the scheme."

    The deal is still subject to Overseas Investment Office approval, and once that's received Trilogy will seek a High Court order ratifying the transaction.

    It's aiming to delist on April 11 and pay shareholders on April 20, Mr Baker said.

    Trilogy issued a profit warning earlier this week, saying earnings could miss guidance by as much as 10 per cent on weak Ecoya candle sales in the fourth quarter and uncertain timing for orders of its Lanocorp beauty products.

    On Tuesday, Trilogy said Business Bakery would pick up certain transaction costs for Citic, and the Grant Samuel report said the skincare products firm planned to enter into consultancy agreements with Steve Sinclair and Grant Baker, with Citic suggesting the skincare products maker pay the same amount of director and consulting fees as it did in management fees to Business Bakery, including potential for renegotiation. Business Bakery received $330,000 in the March 2017 year.

    Trilogy is the second company to delist from NZX this year, following Xero's shift to consolidate its listing on the ASX.

    The Auckland-based company first joined the bourse in 2010 when it was just the Ecoya candle maker, raising $10 million in an initial public offering selling shares at $1 apiece. That was underwritten by the Business Bakery, which ended up buying almost a third of the shares giving it a stake of 65 per cent. That stake was diluted by Ecoya's acquisition of Trilogy the following year.


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