The move has been taken after Aspen Group's lawyers lodged a second statement on its bid, stating its unsolicited takeover offer to acquire all Eureka shares for 0.26 Aspen shares for every one Eureka share was now unconditional as of 16 April.
The Eureka board said it had received notice from businessman Ben Cottle's Filetron, which holds 19.44% of Eureka shares, that it will still not accept the new offer from Aspen. In addition, the four Eureka Directors - Executive Chairman Murray Boyte, Sue Renkin, Russell Banham and Greg Paramor - who hold 2.3% of Eureka shares will not accept Aspen's bid.
"The Offer is inadequate, materially undervalues Eureka shares and is not in the best interests of Eureka shareholders," said the board in a statement to the ASX this morning.
"Shareholders who accept the offer will be receiving Aspen securities with an implied value materially less than the current price of Eureka shares. Based on the last closing price of Aspen securities prior to the date of this announcement, the implied value of the Offer is $0.45 per Eureka share which is materially less than the current price at which Eureka shares trade on the ASX of $0.530 (representing a 15.1% discount).
With Filetron and the Eureka Directors rejecting the offer:
- Aspen will not be able to achieve the 90% threshold needed to compulsorily acquire all Eureka shares during the Offer period. This means that the purported merger benefits, including estimated synergies, claimed by Aspen will not be attainable; and
- Scrip-for-scrip roll-over relief will not be available to Eureka shareholders who accept the Offer.
Aspen Group is now the leading shareholder in Eureka Group with 35.72% of shares.
