Synlait takeover offer extended

MARTA STEEMAN
Last updated 14:56 26/11/2013

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Chinese bidders Shanghai Pengxin and their Canterbury partners have extended the $2.10 a share takeover offer for Synlait Farms by two weeks until December 20.

The bidders have had acceptance for 81.35 per cent of Synlait Farms shares since the offer opened three weeks ago.

Forty-nine shareholders holding 31.17 per cent have agreed to sell.

In addition, the company's founders, John Penno, Juliet Maclean and Ben Dingle, have agreed to sell under a "lockup agreement". Their combined holding is 50.18 per cent.

The bidders need just under 9 per cent of shares to achieve the 90 per cent threshold at which they may then compulsorily acquire the rest.

The takeover offer is being made by Shanghai Pengxin partnered with Penno and Maclean, through a joint venture, SFL Holdings.

Penno and MacLean will use the proceeds of selling their Synlait shares to buy into SFL Holdings. Their combined stake will be 26 per cent.

Steve Howse, chairman of Synlait Farms' independent directors, said there was no certainty that the regulatory approval for the purchase from New Zealand authority, the Overseas Investment office, or from Chinese authorities, would be granted by January 5. That was the deadline given in the initial offer timetable.

SFL had decided to extend the offer timetable to allow for more flexibility for completion of the regulatory processes.

If one or more of the regulatory consents has not been received by December 31 then the offer will increase by 0.19 cents a day until the offer is declared unconditional.

However, the price can increase only if SFL Holdings has reached the 90 per cent minimum acceptance condition in its offer or if it waives that condition.

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