The board of media buyer and market researcher Mitchell Communication Group has agreed to a $363 million takeover offer by Aegis Group.
The board of media buyer and market researcher Mitchell Communication Group has agreed to a $363 million takeover offer by Aegis Group.
Aegis is a London Stock Exchange-listed marketing communications company.
"The board of Mitchell unanimously recommends Mitchell shareholders vote in favour of the transaction in the absence of a superior proposal and subject to an independent expert concluding the scheme is in the best interests of Mitchell shareholders' group," Mitchell and Aegis said in a joint statement.
Aegis proposes to acquire Mitchell via a scheme of arrangement for $363 million, based on the cash consideration of $1.20 per Mitchell share and including options and performance rights.
Mitchell shareholders can elect to receive their consideration in cash, or Aegis shares, or a combination of both.
If the transaction is approved, Mitchell shareholders will also receive a fully franked Mitchell dividend for the 2009/10 financial year of five cents per share.
Mitchell Communication's group executive chairman Harold Mitchell said, "I am delighted that we have reached agreement with Aegis over a deal which I believe is in the best interests of our people, our clients and our shareholders"
"Aegis is the best placed of the global agency groups for the convergent future, with a strong focus on digital and media.
"We are convinced they have enormous growth ahead of them and having Mitchell as part of their global network will be an important part of achieving that. That is why I intend tobecome a significant shareholder in Aegis if the transaction is approved."
"Mitchell is the leading marketing communications group in Australia, the eighth largest ad spend market in the world, and this acquisition is a further step in transforming Aegis' operations in the Asia-Pacific region," Aegis Group chief executive Jerry Buhlmann said.
"Our businesses are a strong strategic and cultural fit.
"Combining Mitchell with our existing business in Australia will create a formidable business for the benefit of all our clients and position us for continued strong growth in the most dynamic region in the world.
"The proposed acquisition will be earnings accretive for Aegis and will enhance the return on invested capital in the first full year post combination."
Mr Mitchell, a 30 per cent shareholder of the target, has pledged to not dispose of 85 per cent of the Aegis shares he will receive under the deal for a period of 24 months.
About half an hour prior to the close of trade, shares in Mitchell emerged from a trading halt entered into on Thursday morning and finished untraded at $1.04.
