Date set for Spicers deal: June 27
The proposed deal by Spicers (formerly PaperlinX) to break the ‘deadlock’ with its hybrid shareholders and restore its capital structure is moving ahead, with a timetable now set for judicial hearings and shareholder meetings to resolve the issue.
The NSW Supreme Court will hold a May 3 hearing on the agreement signed by Spicers in December last year, which would see the hybrid shareholders take a 68.3 percent stake in the company, and chairman Robert Kaye and non-executive director Michael Barker step down from the board of directors. Following that, a shareholder and trust scheme meeting will be held on the same day, June 14, with the deal to be implemented on June 27 and normal share trade resuming on June 28.
In a statement to the ASX about the deal in December, Kaye said the board recognised the ‘sustained period of uncertainty’ experienced by its stakeholders. “Legacy conflicts between respective sets of security holders restrict Spicers’ ability to raise capital, pay dividends and for the market to determine the true value of the business. This in turn significantly limits Spicers’ commercial and financial options.”
“If successful, the Proposed Transaction would result in current SPS unitholders owning more than two-thirds of the combined equity of the Company. We believe this is an optimal ratio, which provides the best opportunity to accommodate both sets of security holders, and offers value to both ordinary shareholders and SPS unitholders.”
“Spicers has come through an exceptional period of disruption in core paper markets and its previous European operations. We are starting to see a clear way ahead at last, but the legacy issue of a complex capital structure still stands in the Company’s way. There will be no winners unless these issues are rationally confronted and resolved,” said Kaye.
In Spicers’ interim report in January, Kaye expressed optimism about the progress of the deal. “We have received generally positive feedback from both ordinary shareholders and SPS unitholders since we announced the signing of the SIA in December 2016. In the Board’s view, the benefits of completing the restructure remain clear and compelling.
“Ultimately the successful implementation of this proposed transaction is in the hands of both sets of security holders,” Kaye said.