The Asaleo Care Ltd (ASX: AHY) share price has returned to trade this morning and is pushing higher again.
At the time of writing, the personal care products company's shares are up 3% to $1.27.
This means the Asaleo Care share price is now up a sizeable 26% over the last two days.
Why is the Asaleo Care share price rocketing higher?
Investors have been scrambling to buy its shares after Asaleo Care became the latest company to receive an unsolicited takeover approach.
Last night the company confirmed that it received an unsolicited, indicative, conditional and non-binding proposal from the ultimate parent of its major shareholder, Essity Aktiebolag (Essity AB).
Essity AB is a global hygiene and health company, with its headquarters in Stockholm, Sweden.
According to the release, Essity AB has made a proposal to acquire all of the ordinary shares in Asaleo at a price of $1.26 per share in cash, less any dividends or distributions declared or paid.
The release also notes that Essity AB has reserved its right to terminate discussions and to withdraw the proposal, for any reason or for no reason, at any time prior to the execution of a binding implementation agreement.
An Essity AB subsidiary currently owns 36.2% of the issued share capital of Asaleo.
What now?
Management notes that the offer is subject to a number of conditions. This includes due diligence, a unanimous recommendation by the Asaleo independent directors, and certain regulatory and other approvals. The latter will include approval from the Foreign Investment Review Board.
Asaleo is obtaining advice from its financial and legal advisers but for now has advised shareholders to take no action in relation to the proposal.
It also feels the proposal of $1.26 per share reflects a low takeover premium to recent market prices and is highly opportunistic in timing. Particularly given how its full year outlook remains strong and its earnings are on track to hit the upper end of its guidance range.
It also notes that its balance sheet is strong and should put it in a position to pay a final dividend again in FY 2020.
The company will continue to update shareholders and the market, in accordance with its continuous disclosure obligations.
