Here is the AFR article - seems discussions have been going on for quite a whileUnited Malt Group investors ask for $5, board readies ‘process’
Anthony Macdonald, Sarah Thompson, Kanika Sood and Emma Rapaport
Mar27, 2023 – 9.35pm
United Malt Group’s taking thelong-road to a near $2 billion takeover, with patient talks over the course ofa year or so to culminate with a formal process and a farewell tour to getinvestors’ blessings.
UMG is understood to be staring at abid worth $4.80 to $5 a share, or a 40 to 45 per cent premium to the lastclose.
At the top of the range, it would behigher than where the company’s traded in its three-years on the ASX bourse,and be expected to appease institutional investors in te absence of a counterbid.
The bidder, as Street Talk revealed on Monday morning, is European suitor Malteries Soufflet, part of Soufflet Group, and backed by European agricultural investor InVivo and financial investors including KKR.
It is understood UMG, advising byMacquarie Capital, and Goldman Sachs-advised Malteries Soufflet have been inconfidential talks for the past year or longer, thinking about what theircombined business would look like.
Sources said the talks had culminatedin this week’s offer, which had UMG’s shares halted from trading on Monday.UMG’s board, headed by veteran chairman Graham Bradley, is expected to confirmthe bid on Tuesday, and announce a formal process to run it past the company’sbig shareholders. Significant due diligence is understood to have been done.
The announcement should give otherpotential suitors one final chance to have a crack, although the fact there’s astrategic player on the scene is likely to scare off private equity.
A handful of big UMG shareholders,including Tanarra Capital which speaks for a 10.8 per cent stake, are likely tobe very influential in what happens next.
It’s old ground for Tanarra, whichpushed GrainCorp to spin-off UMG in 2020, only to then watch the group tradepoorly as a separately-listed company. Tanarra used the weakness to buy back inand has been talking to the company’s board and management teams about ways totry to maximise value.
Interestingly, it’s the secondtakeover in less than two weeks in Tanarra’s reasonably small Long Term ValuePartners portfolio, after Healius received a much more opportunistic bid. The offers suggest Tanarra’s living up to its promise to put private equity-style thinking into public companies.
For anyone playing along at home, theother stocks in Tanarra’s LTVP portfolio are understood to be Lendlease, G8Education, Insignia and Insurance Australia Group.
As for UMG, the early signs point to afriendly deal that would see the ASX-listed company snapped up by its Europeanrival. GrainCorp retains an 8.5 per cent stake in the business.
