In morning trade the Webster Limited (ASX: WBA) share price has rocketed higher after it announced the receipt of a takeover approach.
At the time of writing the food production company's shares are up 54% to $1.96.
What did Webster announce?
According to the release, Webster has entered into a binding scheme implementation agreement with wholly owned subsidiaries of one of Canada's largest pension investment managers, PSP Investments.
Under the scheme implementation agreement, it is proposed that the subsidiaries, PSP BidCo and Sooke Investments, will acquire all of the ordinary shares in Webster that PSP Investments does not already own for a cash price of $2.00 per Webster share by way of a Court-approved scheme of arrangement.
This is a 57% premium to the last close price and a 60% premium to the 30-day volume weighted average price.
PSP BidCo also intends to acquire all of the Webster preference shares on issue for $2.00 in cash per preference share via a separate, contemporaneous scheme of arrangement.
Combined, this implies a market capitalisation of $724 million and an enterprise value of approximately $854 million for Webster.
Managing Director and Chief Executive Officer of Webster, Maurice Felizzi, believes the transaction is attractive for shareholders.
He said: "In assessing the Proposed Transaction, the Non-conflicted directors considered Webster's revenue and earnings profile, the current value of its underlying assets and concluded that the offer from PSP BidCo provided ordinary shareholders with the opportunity to immediately realise a significant premium to the share price without the inherent risks associated with agricultural enterprises."
"The Proposed Transaction provides a substantial premium for both Webster ordinary shareholders and preference shareholders and also provides enhanced certainty and accelerated value for their shareholding. We also concluded that Webster and PSP Investments have complementary, long-term growth aspirations making PSP Investments a logical and suitable owner of the Webster asset portfolio. We are encouraged by their understanding of our business and its ongoing importance to regional and rural communities in Australia," he added.
The offer has been unanimously recommended by non-conflicted directors in the absence of a superior proposal and subject to an independent expert's report. It will also be subject to ACCC and FIRB approval.
