The Invocare Limited (ASX: IVC) share price has jumped 12% higher after receiving and accepting an improved takeover offer.
Invocare is the largest funeral business in Australia and New Zealand.
Takeover offer accepted
The funeral business said that it has received a revised, non-binding indicative proposal from TPG.
This higher offer is $13 per share, including a fully franked special dividend of up to approximately $0.60 per share. For Invocare shareholders that can utilise franking credits, this represents a total value of up to approximately $13.25 per share.
Invocare has agreed to let TPG undertake due diligence (check the financial numbers) on an exclusive basis so that it can then provide a binding proposal.
If the proposal becomes a binding transaction, then Invocare’s board intends to unanimously recommend it to shareholders.
This revised offer comes after the board’s engaging with TPG since the initial offer of $12.65 per share on 7 March 2023. Shareholders and the Invocare share price has benefited from the board’s persistence.
But, there are still a number of conditions including completing satisfactory due diligence final approval by TPG’s investment review committee, entry into an acceptable takeover deal, and a unanimous recommendation from the Invocare board of directors that shareholders vote in favour of the deal.
Is this a done deal?
Invocare noted that there is no certainty at this stage that the revised offer will result in a binding scheme implementation deed for consideration by shareholders.
But, the market seems fairly confident of this going through with the Invocare share price only being 5% lower than the offer price. That’s quite good/close considering the risk-free return that investors could get by having their money in cash to the time of a possible takeover being completed.
Final thoughts on the Invocare share price
It’d be a shame to lose Invocare from the ASX boards considering the business is (morbidly) exposed to long-term tailwinds with Australia’s ageing demographics. But, the rise in the last few months has been helpful.
If I were a shareholder, I’d be happy to sell now because there’s a chance that TPG could decide to walk away rather than follow through with a takeover.
By selling shares, one could then invest the money into attractive, long-term ASX dividend shares.
