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Thrane & Thrane takeover bid accepted

Cobham, parent company of Sea Tel, has announced that it has reached agreement with the board of directors of Thrane & Thrane on the terms of a revised voluntary tender offer for the company.

Under the terms of the revised offer, Thrane & Thrane shareholders will be offered DKK435 in cash for each Thrane & Thrane share, an increase of DKK15 per share over Cobham’s offer announced on 10 April 2012.

At the time of the initial DKK420 offer Cobham had said that this price was final, and that it would not be increased unless another party made a bid for the company.

Cobham says that its u-turn in offering an extra DKK15 per share is based on the value of a dividend that would otherwise have been declared in June 2012 in relation to the year ended 30 April 2012.

The revised offer values the share capital of Thrane & Thrane on a fully diluted basis at approximately £275 million (approximately US$445 million), a 2.6 per cent increase from the initial offer.

Lars Thrane, who founded the company with his brother and is currently a member of the board of management and board of directors of Thrane & Thrane, had stated at the time of the initial offer that he would not sell his share of the company to Cobham.

However, he also seems to have had a change of heart and has now entered into a binding agreement to accept the revised offer in relation to his holding of 1,349,084 shares, representing 22.7 per cent of the fully diluted share capital of Thrane & Thrane.

In addition, the other members of the board of Thrane & Thrane have entered into an undertaking to accept the revised offer in relation to their respective individual holdings, amounting to, in aggregate, 17,040 shares - representing 0.3 per cent of the fully diluted share capital of Thrane & Thrane.

Cobham now owns or has received undertakings in respect of a total of 2,819,919 shares, representing 47.4 per cent of the fully diluted share capital of Thrane & Thrane, having already purchased 25.59 per cent from various institutional investors and on the open market before the bid was accepted by the Thrane board.

The board of Thrane & Thrane has now said that it will recommend the revised offer to its shareholders, and that it will "support and facilitate the making of the revised offer."

Cobham believes that this recommendation will allow it to secure a higher acceptance rate which will "enable a quicker and more effective integration of Thrane & Thrane into the Cobham group."

The offer price of DKK435 represents a premium of 48 per cent on the closing price per share from the Nasdaq OMX in Copenhagen on 24 February 2012, the last trading day prior to Thrane & Thrane's first announcement that it had received an unsolicited offer for the company.

The price also represents a multiple of 15.4 times Thrane & Thrane's operating profit for the twelve month period up to 31 January 2012, on the basis of an enterprise value of DKK2,621 million (approximately US$465 million).

“We are very pleased that, by increasing our offer to take account of the dividend for the year now ended, we have reached agreement with the board of Thrane & Thrane,” said John Devaney, Cobham’s executive chairman.

“Their recommendation will allow us to move quickly, and with certainty, with the integration of Thrane & Thrane into the Cobham group.”

“We believe that this is an outstanding opportunity to bring together two world-class, highly complementary, commercially focused satcom businesses and is in line with our aim of prioritising investment that will bring more balance between our defence/security and commercial markets.”

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