Local online broking firm JDV is the target of Melbourne-based IWL Broking Solutions Group with a takeover offer where JDV shareholders are being offered one new IWL share for every three JDV shares they own.
The board of JDV pre-empted a replacement bidder’s statement from IWL, when last week it despatched a letter to its shareholders recommending no action and responding to inadequacies they see in the latest IWL spiel.
The JDV board claims there would be uncertainty over IWL’s earnings capacity in relation to contract renegotiation currently under way with the National Australia Bank.
However the NAB currently out-sources all online brokering to IWL, which recently posted record half-year earnings of $7.59 million, up 45 per cent on the previous corresponding period.
JDV currently services the online trading arm of Westpac.
The scrip consideration values the company at $1.02 per share, a 25 per cent premium over the volume-weighted average price of JDV shares in the five days prior to IWL’s bid.
JDV shares were trading at 96 cents at the time WA Business News went to print.
Prices aside, IWL directors are pushing the rationale for the JDV bid as risk reduction to JDV shareholders through diversification of its current customer base and convenience through the fact that JDV has an existing plan to establish an interstate capability.
Opposing the IWL offer, the JDV board also claimed in its letter to shareholders to be in “meaningful discussions with other parties”.
In other takeover news, US company Cleveland-Cliffs this week gained control of WA iron ore producer Portman.
Cleveland-Cliffs moved past 50 per cent and declared its $3.85 per share offer unconditional, prompting former Portman chairman George Jones to reverse his earlier rejection of the takeover offer.
The offer has been extended for two weeks to April 5.
Also this week, Consolidated Minerals moved to compulsory acquisition of nickel junior Reliance Mining, after lifting its stake to 96.8 per cent.
Consolidated, which holds minority interests in a range of junior mining stocks, also announced it has lifted its stake in Titan Resources from 8.2 per cent to 14.5 per cent.
Resolution of the Portman and Reliance takeovers leaves two remaining WA takeovers in play – Metcash’s bid for Foodland and CopperCo’s bid for Universal Resources.
