Ann: NRW confirms MACA (MLD) approach, page-35

Thanks Jacko1 I know you know I know you know things.
Interesting about PLS wanting to do its’ own mining …. But using what kit* (*new ‘lingo’ word) ?
And the lithium mines seem to be hatching like rabbits!

… and eeek!
Your take on MACA seems to be backed up by the experts in Bridget’s latest update …
(I wonder who the shareholders she is quoting are?)

Cheers


https://www.theaustralian.com.au/bu...s/news-story/a4fb81aeae151cf8ee05c021fb0e23fe

Higher cash bid for MACA could make sense for NRW Holdings

Autonomous haul truck owned by contractor MACA at Capricorn Metals' Karlawinda gold mine. Picture: Supplied.

• BRIDGET CARTER
  DATAROOM EDITOR
  
• AN HOUR AGO AUGUST 22, 2022

MACA shareholders will find out by early next week if an independent expert thinks the company is selling itself short by backing a $350m takeover bid by Thiess and not holding out for the hope of a rival offer from NRW Holdings.

The mining services provider MACA staged a 121 per cent increase in its reported net profit for the year to June to $35.8m as it cashed in on an uptick in mining activity over the past twelve months from customers like Ramelius Resources, Gold Fields, Regis Resources, Fortescue Metals and Atlas Iron.

The company told shareholders on Monday that an independent expert report would be out by late August as part of its target statement and that shareholders have until September 12 to accept the $1.025 per share cash bid from Thiess.

MACA insists that it has already tried to eek a higher offer out of mining services rival NRW Holdings after DataRoom revealed late last week it had been circling the company.

NRW Holdings offered $1.085 per share in cash and scrip but was rebuffed by MACA, which is urging shareholders to accept the Thiess offer.

NRW Holdings shareholders are backing a purchase of MACA, maintaining that an acquisition could lift its earnings by 15 per cent by acquiring what some believe is a better mining services provider.

NRW is in strong shape and has low debt levels, and the acquisition creates an opportunity to gain a workforce in a tight labour market.

Analysts believe that if NRW Holdings lifted its offer or paid all cash, a deal could still remaining highly beneficial to the company.

Shares in MACA were at about $1.07 in late Monday trade.

Canaccord’s mining services analyst Cameron Bell said the $1bn NRW Holdings could see earnings increase between 3 per cent and 26 per cent in the 2023 financial year before any cost benefits were taken into account if it purchased MACA.

Based on NRW’s offer, its debt level to earnings before interest, tax, depreciation and amortisation would increase to between 0.4 times and 1.2 times, depending on the structure of MACA acceptances.
NRW Holdings proposes three options – an all cash at $1.085 per share, scrip at 0.48 NRW shares per MACA share, and a half share of cash and half of scrip.

Mr Bell believed that the approach was opportunistic, given that it was 3 per cent below MACA’s net tangible assets of $1.12 per share.
He also noted the NTA is well below the market value of the equipment so it would gain the cost of buying the equipment on the market.

Counting in NRW’s favour is that its track record in mergers and acquisitions has been strong, with its acquisition of the BGC Contracting business, Golding and Primero deals being a success.

But it has had a strategy of growing its low capital intensity business, which is at odds with a MACA play.

With all cash at the $1.085 per share offer, NRW’s net debt to EBITDA would be 1.4 times, falling to 1.2 times in the 2023 financial year.
This compares to an all scrip deal, which would leave net debt to EBITDA at between 0.5 times and 0.4 times in fiscal 2023.

While NRW is offering a higher price in a scheme of arrangement, it requires due diligence and is subject to funding, while Thiess is paying all cash as part of its deal to buy the business through a takeover structure that requires 90 per cent of shareholder approval.