ASG offers $123m for SMS

29/05/2017 - 11:47

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Perth IT firm ASG Group has made an all-cash $123.4 million offer to acquire Melbourne-based SMS Management & Technology, but the target has maintained its recommendation of an offer previously put forward by another competitor.

ASG offers $123m for SMS
Geoff Lewis has managed ASG Group since its inception in 1996.

Perth IT firm ASG Group has made an all-cash $123.4 million offer to acquire Melbourne-based SMS Management & Technology, but the target has maintained its recommendation of an offer previously put forward by another competitor.

Geoff Lewis's ASG, which became a subsidiary of Japanese consulting and IT services firm Nomura Research Institute last year after it was bought for $349 million, has offered SMS $1.80 in cash per share under an expression of interest.

The offer competes with a scheme of arrangement initiated by Melbourne-based IT provider DWS, which offered SMS shareholders $1 in cash and 0.39 DWS shares for every SMS share in February.

The competing offer values SMS at $124 million.

“The SMS board, after receiving advice from its legal and financial advisers, has concluded that the (ASG) EOI may reasonably be expected to lead to a superior proposal,” SMS said in a statement today.

The target said it would engage with ASG subject to negotiation of a confidentiality agreement, but it maintained that DWS’s offer was in the best interests of its shareholders.

“The SMS board continues to unanimously recommend that SMS shareholders vote in favour of the DWS scheme in the absence of a superior proposal emerging or the independent expert changing or qualifying their conclusion that the DWS scheme is in the best interests of SMS shareholders.”

Shareholders will vote on the DWS acquisition at a scheme meeting on June 14.

SMS is headquartered in Melbourne, but acquired an office in Perth in 2014 after its takeover of Birchman Group.

SMS shares were 4.1 per cent higher to $1.76 each at 11:40am.

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