Pioneer signs $120m scheme with Carlyle

Pioneer Credit has named US investment group Carlyle as preferred bidder to acquire the business, at a price of $1.82 per share, a large discount to the company’s latest closing price of $2.46 per share.

Carlyle plans to acquire all of Pioneer’s 63.4 million shares on issue.

Pioneer plans to pay its shareholders a fully franked special dividend of up to 24 cents per share prior to the implementation of the scheme, which is pending shareholder and court approval.

The US firm will also acquire Pioneer’s net debt of around $168 million, as at October 31, bringing its total enterprise value to around $288 million.

Pioneer has appointed Azure Capital as financial adviser and K&L Gates as legal adviser to the offer.

The announcement follows months of non-binding proposals for Pioneer, with US-based Bain Capital reported earlier this year to be among three bidders for the struggling debt management company.

Pioneer chairman Michael Smith said the board had considered a range of alternative proposals.

“The process for considering alternatives has been extremely thorough and has carefully evaluated both change and control, and additional or alternative funding options for Pioneer,” he said.

“Ultimately, the board concluded that the scheme proposed by Carlyle struck the right balance, as well as maximising value for all Pioneer shareholders.”

The board has unanimously recommended shareholders vote in favour of the scheme, in absence of a superior proposal.

The offer from Carlyle is subject to Lonergan Edwards, appointed as the independent expert to the proposal, concluding it to be in the best interests of Pioneer shareholders.

The first court hearing is due in late February.