Melrose PLC to Acquire Elster Group SE – ELT
Elster Group SE (NYSE: ELT) announced that it has entered into a definitive agreement with Melrose PLC, pursuant to which a wholly-owned subsidiary of Melrose PLC would offer to acquire all outstanding American Depositary Shares of Elster (ADSs, each of which represents one-fourth of one ordinary share of Elster (Share)), for $20.50 per ADS in cash (the ADS Offer Price) and all Shares for $82.00 per Share in cash, representing an aggregate value for all outstanding ADSs and Shares of approximately $2.3 billion.
The Administrative Board of ELT has unanimously approved the transaction. ELT has been informed by its largest shareholder, Rembrandt Holdings S.A., that Rembrandt has agreed to tender the 17,412,069 Shares owned by it and the 531,025 ADSs owned by its wholly-owned subsidiary (collectively representing approximately 62 percent of the outstanding share capital of Elster) into the offer.
The ADS Offer Price represents a 48.6 percent premium over the closing price on June 11, the last day prior to press speculation that Rembrandt was considering a sale of its Elster holding, and a 45.6 percent premium over the one month volume weighted average price per ADS as of the same date.
The transaction will be funded by a fully underwritten rights issue by Melrose that is expected to raise approximately 1.2 billion pounds Sterling as well as by an acquisition tranche of 0.25 billion pounds under a new term and revolving credit facility of Melrose.
The closing of the tender offer is conditional, among other things, on holders of Shares and ADSs tendering at least 75 percent of the outstanding share capital of Elster, approval of the acquisition of Elster by the shareholders of Melrose at a general meeting, admission of the Melrose rights issue shares to the premium segment of the UK Financial Services Authority’s Official List and to trading on the main market of the London Stock Exchange, and clearances by relevant regulatory authorities. The transaction is expected to close in the third quarter of 2012.
“This transaction will consolidate ownership of Elster and deliver value to current stakeholders,” said Simon Beresford-Wylie, chief executive officer of Elster.
About Elster – ELT
Elster (ELT) is one of the world’s largest electricity, gas and water measurement and control providers. Its offerings include distribution monitoring and control, advanced smart metering, demand response, networking and software solutions, and numerous related communications and services – key components for enabling consumer choice, operational efficiency and conservation. Its products and solutions are widely used by utilities in the traditional and emerging Smart Grid markets.
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Post Written By: Ed Liston
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.
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