KUALA LUMPUR: UEM Edgenta Bhd
has accepted the takeover offer from WSP Global Inc for the purchase of its 61.2% stake in New Zealand-based Opus International Consultancy Ltd (Opus).
WSP will purchase UEM Edgenta's stake, comprising of 90.51 million shares in Opus for NZ$1.85 a share, for NZ$167.44mil (RM512.48mil) which includes the option for Opus to declare and pay a dividend of up to seven cents a share to its shareholders.
UEM Edgenta announced to Bursa Malaysia on Tuesday the takeover offer document was received by OIC on Aug 30 following the waiver by WSP Global of the due-diligence pre-condition contained in the lock-up agreement.
“The proposed disposal of Opus is an opportunity for UEM Edgenta to monetise its investment upfront at a healthy premium over the current market price and will enable the company to reduce its gross gearing from 0.8 times (post drawdown of Sukuk of RM300mil in April 2017) to 0.4 times,” UEM Edgenta said.
Opus is a leading multi-disciplinary infrastructure consultancy. It provides services on leading infrastructure projects for both the public and private sectors.
As for WSP Group, it provides technical expertise and strategic advice to clients in the property & buildings, transportation & infrastructure, environment, industry, resources (including mining and oil & gas) and power & energy sectors.
In a note to Opus minority shareholders, WSP Global Inc president and CEO Alexandre L’Heureux said the offer of NZ$1.78 per Opus share and cash dividend of up to seven cents per Opus Share was in the best interests of Opus shareholders.
“WSP believes it represents a compelling offer for all Opus shareholders, specifically being at a premium of 85.1% and 84.8% to the one and three-month volume weighted average price (VWAP) per Opus share for the period ended on Aug11.
L’Heureux said that combining with Opus is an attractive opportunity for both parties. He added that through WSP Group’s strong global presence, Opus will be able to greatly leverage WSP’s customer base and strong international brand equity to significantly bolster its positioning and growth outside of New Zealand.
WSP said Opus operates in Australia, Canada & USA and the UK, as well as New Zealand. Opus also has some existing contracts in the Middle East & North Africa but has stated that trading activities in that region are not supportive of growth.
Opus is competing against larger global and / or local players in offshore markets. Some of these markets have also faced cyclical challenges. Accordingly, Opus has not delivered strong and consistently profitable results from its overseas operations in recent years.
WSP pointed out Opus' offshore entities of Australia, Canada & USA and the UK recorded FY2016 operating revenue of NZ$189.3mil (2015: NZ$227.2mil) and an operating EBIT loss of NZ$9.8mil (2015: NZ$1.5mil).
“These results negatively impacted Opus’ overall performance. Opus’ more stable New Zealand business recorded broadly flat revenue and EBIT in 2016 and 2015.
“Opus’ flat New Zealand performance and its poor results in competitive and cyclical offshore markets are reflected in the share price performance of Opus,” WSP said.
WSP's offer for acceptance by UEM Edgenta is until 11.59 pm on Nov 27, 2017.
UEM Edgenta also requires shareholders' approval at a general meeting, expected to take place in the fourth quarter of 2017, for the proposed disposal.
Limited time offer:
Just RM5 per month.
