Burswood creates quandary
Kerry Packer’s Publishing and Broadcasting has created a quandary for Burswood shareholders by making a conditional six cents a share increase in the value of its takeover offer.
PBL has offered $1.46 per share for Burswood, but only if it acquires at least 90 per cent and if Burswood’s board unanimously recommends acceptance.
Burswood shareholders who accept the current offer could end up receiving just $1.40 per share if the two conditions are not met. This move makes perfect sense for PBL, which wants to gain full control of Burswood.
Burswood’s directors have advised shareholders to take no action for now.
One option for Burswood’s directors is to negotiate a deal with PBL, whereby they accept the $1.46 a share price but on the proviso that PBL lifts the conditions. This would provide more certainty for Burswood shareholders.
If the directors reject the new offer and PBL walks away from the deal, it is likely Burswood’s share price would fall well below its current level of about $1.42. They could reject the offer on the grounds it is still below the independent experts’ valuation of $1.52 to $1.68 a share.
An interesting tactical move was PBL’s appointment of UBS as co-financial adviser and Patersons Securities as co-broker to the offer alongside Macquarie Bank. As a result, Patersons analysts are unable to publicly comment on the offer.