Di Latte family offers $7m for Diploma

The family that holds a majority interest in Diploma Group has formally launched a takeover offer for all shares it doesn’t own in the business, at a bargain basement price of 1.5 cents per share.

The deal values the entire business at $7 million and means the Di Latte family would end up paying about $3.87 million to acquire the shares it doesn’t already own.

The offer price is in line with Diploma's current share price. That is up from a recent all-time low of 1.1 cents, but well down from about 4 cents in February.

The company said the offer was at a 15 per cent premium to the ASX closing price of 1.3 cents on 4 September, before the potential offer was announced.

Diploma listed on the ASX in 2007 after raising $9 million at 50 cents per share. Its market value upon listing was $60 million.

It raised a further $15 million in 2010 at 45 cents per share.

Earlier this week, Business News reported that Diploma was seeking privatisation.

The Di Latte family’s 45.43 per cent stake in Diploma is help by four private companies – Wandina Holdings, UP Investments, Healthy Holdings and ND Properties.

Diploma is led by Nick Di Latte, the son of founder Dominic Di Latte.

Diploma’s two independent directors, Jason Ferris and Jeffery Hill, established a committee to evaluate the proposal, which has recommended shareholders vote in favour of the proposal in the absence of a superior offer.

“Diploma will appoint an independent expert to prepare an independent expert’s report on whether the scheme is in the best interests of scheme participants,” the company said in a statement.

The Di Latte family is being advised by legal firm HopgoodGanim, while Diploma is being advised by Steinepreis Paganin.