The Webster Limited (ASX: WBA) share price is going to go nuts today after announcing it has entered into takeover proceedings.
Webster is one of Australia’s leading agricultural businesses. It operates walnut and almond orchards in New South Wales and Tasmania, irrigable land for cotton and other annual crops, cattle and dorper sheep production, a portfolio of water entitlements and an apiary business in New South Wales.
Webster’s Takeover Offer
Webster has announced this morning that a subsidiary of the Public Sector Pension Investment Board (PSP Investments) called PSP BidCo is going to acquire all of the shares of Webster that it doesn’t already own for $2 cash per share.
Canada has a number of large pension funds looking to generate returns and PSP invests on half of the Canadian Federal Public Service, the Canadian Forces, the Royal Canadian Mounted Police and the Reserve Forces. PSP Investments already owns 19.1% of Webster, so it’s looking to buy the rest now.
The offer of $2 per share is a 57% premium to the most recent closing share price and a 60% premium to the average share price over the past 30 days. The bid also represents a 47% premium to the net assets per share (including the water rights) at 31 March 2019 of $1.36, which is the last time the net assets were disclosed.
The non-confliced directors of Webster will unanimously recommend Webster shareholders vote in favour of this proposal.
But if the takeover goes ahead, there will be some corporate action afterwards. Webster will transfer certain assets into a new business called KoobaCo for a value of $276.7 million – being the Kooba business, Hay business, southern grazing business, the apiary business and certain water rights related to the above properties.
After that, Belfort and Verolot (which own 12.5% and 10.7% of Webster respectively) will be given the opportunity to buy 50.1% of KoobaCo, but the takeover isn’t dependent on this.
Webster’s Managing Director and CEO, Maurice Felizzi, said that this offer provides substantial value for shareholders without the agriculture risks, and that PSP Investments would be a good long term owner.
I’d be happy to sell soon if I were a Webster shareholder, particularly with how volatile the global share market is right now. It could be a good idea to re-invest the money back into the reliable shares in the free report below.
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