PCH shares up 22% as takeover proposal confirmed

Malaga-based scaffolding and form-work supplier PCH Group Ltd has confirmed it received a 90 cents-per-share takeover proposal, and that the offer merited further discussion.

The company, which did not name its suitor, said it believed the offer came at an inopportune time, as well as being undervalued.

Nonetheless, the PCH board said it would continue discussions with the suitor in hope of securing a higher takeover price.

PCH shares were up 22 per cent to 83 cents at close of trade.

The company said it anticipated a weak first half profit result after a series of delays between major projects and expansion costs, it informed the market last week.

The full text of a company announcement is pasted below

PCH Group Ltd advises that it has received an indicative, non-binding and conditional proposal from a trade buyer in relation to a possible cash takeover offer for PCH at an indicative offer price of 90 cents per PCH share.

The PCH board believes that this approach comes at an inopportune time for PCH given its previous advice to the market that the 2006-07 financial year will be one of transition for the Company. The PCH board is convinced that the benefits of its expansion in international markets and PCH's growing reputation in local markets will deliver significant growth in earnings in the 2007-08 year and beyond.

The board of PCH has decided that whilst it considers the company's value to exceed 90 cents per share, the approach does warrant further discussion to determine if the potential offeror is prepared to pay a price that the PCH board would recommend to shareholders.

PCH notes that there is currently no certainty that any binding proposal will be received at 90 cents or at any other price.

Shareholders and other parties considering trading in PCH shares should not assume that a binding proposal will emerge from these discussions.

PCH has appointed Gresham Advisory Partners as its financial adviser.