The board of takeover-target Vehicle Inspection New Zealand (VINZ) has officially recommended shareholders don’t sell – claiming the price is “inadequate” – and that there could be other offers on the table.
The board initially advised shareholders they should not sell, pending the preparation of an independent adviser’s report, and the review of this by the Takeovers Panel.
That report, by Simmons Corporate Finance, values the company in all scenarios above the $1.65 offer. If the Vehicle Licensing Reform leads to a reduction in warrant of fitness, certificate of fitness and motor vehicle registration business, it says the shares are worth $1.77 to $1.93.
If just WoF volume is reduced, shares are worth $2.27 to $2.55 a share, and if the status quo is maintained, $3.26 to $3.70 a share.
The report notes that past trades of VINZ shares on the ‘unlisted’ board, are unlikely to be a reliable indicator of value, due to the low volume traded.
It also notes that the takeover bidder, JEVIC – through its partners – secured the shares they already have agreements on at at a rate of $2.19 – with some, held by Brent Whale, at $2.50.
In a statement sent to shareholders yesterday, VINZ chairman Ken Worsley, reiterated the company’s ‘don’t buy’ position.
“While it is for individual shareholders to make their own decisions as to whether or not they agree with the assumptions and conclusions in the independent adviser’s report, or the opinions of the directors, it is our view that the offer price is inadequate,” he says.
“However, we suggest shareholders carefully read the report and the target company statement that we sent to them today and consult with their own advisers to make an informed decision on the merits of the offer, taking into account their own personal position.”
The VINZ Board has included in their letter to shareholders a list of six key reasons why they reject the JEVIC share price offer – including the offer price, that it does not account for cash reserves held by the company that equate to $1.27 a share, that it does not account for the consistent dividends the company produces, that forecast profit for 2013 is strong, and the earlier mentioned higher prices paid for the initial JEVIC share parcels.
Interestingly the board has also indicated – both in the statements to shareholders and to the independent reviewer – that other bids for the company could be forthcoming.
JEVIC NZ chief executive 
Euan Philpot says the company is still reviewing the new material.
“We have this afternoon (Wednesday) received a copy of the Independent Adviser’s Report, the Target Company Statement, and the chairman’s letter, which we will review and consider before making a response,” Philpot says.
“We have to date received acceptances from seven shareholders representing 21.48% of the VINZ shares,” he notes.
“These include acceptances from three of the four shareholders acting in concert with JEVIC.”
Philpot also confirmed that one of the conditions of sale has been confirmed – with general manager Frank Willett agreeing to stay on with VINZ if JEVIC’s offer is successful.
The offer closes February 13.
