tcl take over

Well it has arrived finally, yet taken us by surprise;

"Transurban Group (TCL) today declared its intention to make a $1.26 billion offer for all the stapled securities in Sydney Roads Group (SRG). As part of the transaction, the electronic toll road operator also provided distribution guidance of 57c per security for the 2008 fiscal year.

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The company had previously announced guidance for fiscal ‘07 of 54c per Transurban security.

Transurban has offered SRG shareholders either one Transurban security for every 5.7 SRG securities, known as the All Scrip Alternative, or $1.32 cash per SRG security up to a maximum cash consideration of $500 million, known as the Cash Pool Alternative.

The relative mix of cash and securities under this alternative would vary according to the number of SRG security holders who accept it, Transurban said in a release to the market.

If less than 40.6% of SRG security holders elect the Cash Pool Alternative, those that accept it would receive all cash consideration for their securities, the company added.

The All Scrip Alternative implies an offer price of $1.35 per SRG security, based on Transurban’s closing security price on 12 December 2006 of $7.69. The Cash Pool Alternative implies an offer price of $1.32 per SRG security.

Transurban said the All Scrip Alternative represents a premium of 24.9% to the SRG volume weighted average price (“VWAP”) from listing on 31 July 2006 to 12 December 2006.

SRG chief executive officer Ed Sandrejko said that from day one, SRG’s strategic purpose and operational focus was on generating value for the holders of SRG stapled securities.

“This offer from Transurban delivers on that focus and represents a good offer for SRG security holders,” he said.

The directors of SRG have recommended that SRG shareholders accept the offer by Transurban in the absence of a superior proposal.

SHAW Stockbroking analyst Luke Maffei said the deal would put Transurban in a strong position, with the company having interests in all Sydney toll roads apart from the unlisted Cross City Tunnel and Lane Cove Tunnel.

"On the face of it seems like a good deal for both sides," he said.

Transurban managing director Kim Edwards said the merging of the two toll road groups has a strong strategic rationale for both SRG and Transurban security holders.

“Transurban’s offer provides full value to SRG investors as well as providing them with two different methods of acceptance,” Mr Edwards said.

“Transurban is seen by many as the natural owner of the SRG assets, which include major interests in the M4, M5 and the Eastern Distributor.

“The SRG assets complement our existing portfolio and we see particular synergy opportunities with our Hills M2 and Westlink M7 motorways,” he concluded.

Shares in both Transurban and Sydney Roads Group were placed in a trading halt yesterday and are set to resume trade at 1100 AEDT today.

Shares in the former company last traded at $7.69, while those in the latter last traded at $1.16.