Scottish Pacific Group Ltd (ASX:SCO) shares leap 16% higher on Affinity takeover deal

Financial services provider Scottish Pacific Group Ltd (ASX: SCO) has seen its shares zoom 15.37% higher after returning to trade this morning.

Up 58 cents, Scottish Pacific shares are trading at their highest ever price of $4.32 just before midday.

Why has the Scottish Pacific share price zoomed higher?

Scottish Pacific shares were placed in a trading halt at the end of trade on Thursday, pending a material announcement by the company regarding a possible takeover by Asian private equity firm Affinity Equity Partners.

This morning the company announced that it has agreed to the takeover, valued at around $630 million.

Under the terms of the Scheme, Scottish Pacific shareholders will be entitled to receive $4.40 per share in cash, representing a 17.6% premium to the last closing share price of $3.74.

The transaction will be implemented by a scheme of arrangement under Australian law and is subject to certain conditions that must be satisfied or waived for the Scheme to be implemented.

The Scottish Pacific board has unanimously endorsed the Scheme and recommend that shareholders vote in favour of it, subject to no superior proposal emerging.

Scottish Pacific’s Chairman, Patrick Elliott, said: “Affinity Equity Partners’ proposal represents a significant premium to SCO’s recent share price, and entitles all SCO shareholders to receive up to 100% of the Scheme Consideration in cash which provides value certainty for shareholders. We believe the proposal is consistent with the Board’s efforts to maximise shareholder value.”

Scottish Pacific shareholders will be given the opportunity to vote on the Scheme at a meeting that is expected to be held on 30 November 2018.

If approved, the Scheme is expected to be implemented in late December 2018.

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Motley Fool contributor Lauren Surplice has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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