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Why the Evans Dixon (ASX:ED1) share price is up 7% as the All Ords slides

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The Evans Dixon Ltd (ASX: ED1) share price is bucking the wider selling trend on the All Ordinaries Index (ASX: XAO) today. Evans Dixon’s share price is up more than 7% while the All Ords is down almost 2%.

This comes following this morning’s announcement of a takeover offer from 360 Capital Group Ltd (ASX: TGP).

Today’s rise will come as welcome news to Evans Dixon shareholders, who’ve watched the share price fall 37% year-to-date. That’s despite a 20% share price gain since 17 March.

Meanwhile, 360 Capital Group’s shares are trading flat in late afternoon trading, after posting gains of more than 1% earlier today. Year-to-date, 360 Capital Group’s share price is down 25%.

What do Evans Dixon and 360 Capital do?

Evans Dixon is a financial adviser providing advice to private and institutional clients, as well as corporates. The company employs over 475 staff across Sydney, Melbourne, Canberra, Brisbane and New Jersey.

360 Capital Group is an investment and funds management group. The company is predominantly focused on the strategic and active investment management of alternative assets. It invests in real estate, credit strategies, and public and private equity in Australia and around the world.

Why is the Evans Dixon share price up on the takeover offer?

This morning’s takeover announcement from 360 Capital Group – made via its wholly owned subsidiary, 360 Capital ED1 Pty Limited – stated its intent to acquire via off-market takeover all of the shares in Evans Dixon that it does not already own.

As of this morning, 360 Capital ED1 owned 19.55% of Evans Dixon’s shares.

The takeover offer price amounts to 61 cents per share. That’s just under the share price Evans Dixon is currently trading for. The current Evans Dixon share price represents a 7.83% gain from the opening bell.

360 Capital noted it has the available cash as well as the ability to issue its securities to finance the acquisition. It stated that its offer is not subject to a minimum number of acceptances.

360 Capital also highlighted that its 61 cent per share offer price represents a 54% premium to Evans Dixon’s share price after it had disclosed ASIC was taking corporate action against one of its subsidiaries, Dixon Advisory.

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Motley Fool contributor Bernd Struben 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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