Brisbane company Campbell Brothers' hostile $123 million takeover bid for Perth minerals testing group Ammtec finally appears to be making some headway, with institutional investor BT believed to have accepted the $3.35 per share offer.
Brisbane company Campbell Brothers' hostile $123 million takeover bid for Perth minerals testing group Ammtec finally appears to be making some headway, with institutional investor BT believed to have accepted the $3.35 per share offer.
BT's acceptance is expected to be confirmed in the next day with the release of an initial substantial shareholders notice showing Campbell Bros holding just over 5 per cent of Ammtec. Campbell Brothers' advisers are hoping BT's acceptance will encourage other institutions to accept and hedge funds to position themselves, thereby improving the bid's prospect of success against fierce opposition from the Ammtec board.
Campbell Brothers is offering $3.35 in cash per Ammtec share, or a scrip alternative of 2 Campbell Brothers shares for every 17 shares in the Perth group.
But Ammtec has rejected the offer as low-ball and not reflective of its bright prospects and underlying value. Last month it released guidance suggesting net profits would rise to between $11.1 million and $12.9 million next financial year on revenue of $73 million to $79 million.
Campbell today countered with its own upgraded profit forecast to try and sway Ammtec investors toward its offer, stating it expected to post a record half year profit of $63 million. Ammtec shares today jumped 10 cents to $3.45, while Campbell Brothers shares were up $1.18 to $30.48, valuing its scrip offer at $3.58.
Meanwhile Campbell Brothers expects to post a record half-year underlying net profit of $63 million.
The company said the profit was due to favourable trading conditions and solid contributions from acquisitions Pearlstreet and Ecowise.
Campbell's $123 million offer was rejected by Ammtec's board at the beginning of the month because the board believes the company was on the verge of a significant upturn in revenue and earnings.
Campbell announced an expected result of between $63 and $68 million for the six months to September 30, compared with $38 million actual net profit for the same period last year.
That was ahead of the record $57 million result achieved prior to the global financial crisis in the half year to September 2008, the company said in a statement.
Campbell, which offers laboratory and technical services and makes cleaning and chemical products, acquired Perth-based mining supplier Pearlstreet and environmental monitoring and research group Ecowise in the second half of last year.
The acquisitions had a neutral impact on 2009/10 second half earnings as integration and restructuring costs were absorbed, but made a solid contribution in 2010/11.
