Michael Hill family launch partial takeover

(PR.co.nz) Michael Hill family interests launch partial takeover offer for Michael Hill International

A partial takeover offer for Michael Hill International Limited (MHI) has been announced today by interests associated with the company’s founder Michael Hill.

Durante Holdings Pty Limited (Durante), the holding company for the 47.63 per cent of the total shares in MHI owned by interests associated with Mr Hill, will offer 90 cents a share for 10.03 million shares in MHI. This will increase Durante’s holding to 50.2 per cent.

Emma Hill, a director of Durante, says at present the family shareholding is locked in the “no-fly zone” (between 20 and 50 percent) where no further shares can be acquired without making a Takeover Code compliant offer to all shareholders.

“The acquisition of this small percentage of shares in MHI will give the family interests flexibility to acquire additional shares in compliance with the Takeovers Code should there be attractive opportunities to do so.”

“Should our offer be successful then we will be able to acquire additional shares in MHI up to the 5 per cent limit specified in the Code in any 12 month period.”

“This offer signals the family’s confidence in the future of MHI as well as giving existing shareholders the opportunity to sell a proportion of their shares at a premium.”

“There is no intention at this time to make a full takeover offer or indeed to sell our shares.

“Durante does not presently intend to make any material changes to the business of MHI or its subsidiaries, but it reserves the right to do so in future. We are also supportive of a board structure that includes three independent non-executive directors,” Ms Hill says.

The offer price of 90 cents represents a 6% premium to Friday’s closing price, as well as a 19% premium to the 90 day volume weighted average price. It also exceeds the highest price MHI shares have traded at in the last two years.

The offer will invite all MHI shareholders other than Durante to sell up to 5 per cent of their holding into the offer, plus shareholders can lodge additional acceptances for any further shares they wish to sell. Should the total number of shares offered exceed the 10.03 million being sought, then scaling will apply to the additional shares offered above the specified 5 per cent. The offer is conditional on Durante receiving applications for at least 9.2 million shares to take its holding above 50 per cent. The offer is also conditional on Overseas Investment Office approval being received.

“We are making a partial offer that will give all our shareholders the opportunity to participate on an equal basis and realise a small proportion of their shareholding at a premium,” Ms Hill says.

Pre-bid agreements have been entered into with two of MHI’s institutional shareholders. ACC and NZ Super Fund have committed to accept their entitlements and lodge additional acceptances for a total of 3 million and 1 million shares respectively, at the same price and on the same terms as all other MHI shareholders other than Durante.

The formal offer document will be dispatched to all MHI shareholders in January.

Media Release on 20 December 2010 from Michael Hill International (MHI) via NZX.