PLE
27/11/2015 08:31
TAKEOVER
PRICE SENSITIVE
REL: 0831 HRS Pulse Energy Limited
TAKEOVER: PLE: NZAX - PLE - Independent Committee Releases Recommendations
INDEPENDENT COMMITTEE RELEASES RECOMMENDATIONS IN RESPECT OF FULL TAKEOVER
OFFER FROM BULLER ELECTRICITY LIMITED
Buller Electricity Limited has made a full takeover offer to acquire all of
the shares in Pulse Energy Limited (NZAX: PLE) not already held by Buller,
all of the mandatory convertible notes issued by Pulse and all of the options
to subscribe for ordinary shares in Pulse.
The Board of Pulse formed an Independent Committee of Directors to consider
and respond to Buller's offer. The Independent Committee appointed Campbell
MacPherson Limited as Independent Adviser to prepare an Independent Adviser's
Report on the merits of the offer.
Offer timing
The offer will be open for acceptances until 11.59 pm on 16 December 2015,
unless the offer is extended in accordance with the Takeovers Code.
Pulse will send its Target Company Statement and the Campbell MacPherson
report to Pulse shareholders, MCN holders and option holders on 30 November
2015. Those documents will also be released to NZX at the same time as this
announcement.
Offer price
Buller is offering to purchase Pulse shares for 11 cents per share, Pulse
MCNs for $1.10 per note and Pulse options for 5 cents per option. Buller
currently holds or controls 55.9% of the shares in Pulse, but no MCNs or
options.
In comparison to the offer prices, Campbell MacPherson assesses the value of
Pulse shares in the range of 9.2 cents to 11.3 cents per share and assesses
the (before tax) value of Pulse's MCNs in the range of $1.11 to $1.115 per
MCN. Campbell MacPherson's maximum assessed value for Pulse options is 2.8
cents per option.
Accrued interest on Pulse MCNs
Under the terms of the offer, Buller will pay to Pulse MCN holders who accept
the offer (or whose Pulse MCNs automatically convert into Pulse shares) the
interest that accrues on the Pulse MCNs up to the date on which Buller pays
for Pulse MCNs acquired under the offer.
As noted above, the offer has a closing date of 16 December 2015 (unless
extended). Assuming Buller makes payment for the Pulse MCNs on 22 December
2015, the accrued interest will be approximately 1.4 cents per Pulse MCN
before tax, and can be expected to be paid by the end of January 2016 if the
offer is not extended and the offer, together with any compulsory
acquisition, results in Buller becoming the owner of 100% of Pulse. If the
offer/payment date was extended, accrued interest will increase as interest
accrues on the MCNs on a daily basis.
If the offer does not result in Buller becoming the owner of 100% of Pulse
(i.e. if Buller waives the condition requiring acceptances to take its
shareholding to 90%), the accrued interest should be paid to accepting Pulse
MCN holder shortly after the next six monthly interest payment which is due
to be paid on 2 May 2016.
The Offer price for the Pulse MCNs, when added to an accrued interest payment
of 1.4 cents per Pulse MCN, amounts to $1.114 cents per Pulse MCN (before
tax). This amount is within, but close to the bottom of, Campbell
MacPherson's assessed (before tax) value range.
Certain tax matters in respect of the offer for the Pulse MCNs and payment of
accrued interest are discussed in the Independent Committee letter that forms
part of the Target Company Statement. MCN holders should take their own tax
advice on those matters.
Independent Committee recommendations
The Independent Committee's recommendations are not unanimous, as the
recommendation given by Trevor Janes, James Hoseason and Peter Young differs
from Joseph van Wijk's recommendation.
Unless someone else makes a competing takeover at a higher price, Trevor
Janes, James Hoseason and Peter Young recommend that:
If you only hold Pulse shares, you should accept the offer for your shares.
If you hold Pulse options, you should accept the offer for your options.
If you only hold Pulse MCNs or hold Pulse MCNs and Pulse shares, Trevor
Janes, James Hoseason and Peter Young do not provide a recommendation at this
stage. Their reasons for this, and their comments on the merits of the offer
for Pulse MCNs are set out in the Independent Committee letter that forms
part of Pulse's Target Company Statement.
Unless someone else makes a competing takeover at a higher price, Joseph van
Wijk recommends that Pulse shareholders, Pulse option holders and Pulse MCN
holders should accept the Offer.
In forming its recommendations, the Independent Committee had regard to a
range of factors, including the merits analysis set out in the Campbell
MacPherson report.
Ultimately, it is each Pulse security holder's decision whether or not to
accept the offer. Shareholders, MCN holders and option holders should wait to
receive, then carefully read, the Target Company Statement and the Campbell
MacPherson report before making that decision. In addition, shareholders, MCN
holders and option holders should consider their individual circumstances,
views on value and the merits of the offer, and investment time horizon.
They are encouraged to consider taking their own separate professional advice
(e.g. from a lawyer or financial adviser) tailored to their circumstances.
Intentions of Directors and Senior Officers in respect of the offer
Frank Dooley (Director), Joseph van Wijk (Director), Gary Holden (Pulse's
CEO) and Neil Williams (Pulse's GM Energy Supply and Operations) and/or their
associated interests intend to accept the offer for the Pulse securities that
they hold or control. Frank Dooley is a director of Buller and accordingly is
not a member, and has not participated in the deliberations, of the
Independent Committee.
Directors Trevor Janes, James Hoseason and Peter Young and/or their
associated interests do not intend to accept the offer for the Pulse
securities that they hold or control.
These statements of intention reflect the present intentions of Pulse's
Directors and Senior Officers. However, the Directors and Senior Officers
reserve their right to change their intentions - including if there was a
change in circumstances or if someone makes a higher value competing takeover
offer. If Directors or Senior Officers change their intentions, they will
update NZX accordingly.
-ENDS-
Trevor Janes
Deputy Chairman of the Board and Chairman of the Independent Committee
Pulse Energy Limited
Peter Young
Director and Member of the Independent Committee
Pulse Energy Limited
James Hoseason
Director and Member of the Independent Committee
Pulse Energy Limited
Joseph Van Wijk
Director and Member of the Independent Committee
Pulse Energy Limited
End CA:00274185 For:PLE Type:TAKEOVER Time:2015-11-27 08:31:28
