The Kangaroo Island Plantation Timbers Ltd (ASX: KPT) share price is surging today after the company was subject to a complete takeover bid from an investment fund called Samuel Terry Asset Management.
The Kangaroo Island Plantation share price is up 7.6% to $1.13 per share as a result.
Kangaroo Island Plantation is a logging and timber business located on Kangaroo Island off the coast of South Australia. The company has been subject to multiple takeover and land-acquisition bids since the devastating Kangaroo Island fires wiped out its plantations, so let’s take a look at this latest offer.
Kangaroo Island Plantation takeover bid
Samuel Terry Asset Management’s bid is to buy all fully paid ordinary shares in Kangaroo Island Plantation for $1.05 per share. The bidder has appointed Third Party Platform as its broker for the purchase of the Kangaroo Island Plantation shares on-market.
On-market means the offer is unconditional, and provides current Kangaroo Island Plantation shareholders “a simple cash exit from [their] investment” according to the company’s release.
Samuel Terry’s offer states that $1.05 per share “is equivalent to the closing price of Kangaroo Island Plantation shares on 30 April 2021 (the last trading day prior to the announcement of the offer).
It’s also equivalent to the 1 month volume-weighted average price (VWAP) of the company’s shares to 30 April 2021 and represents a premium of 3% to the 3-month VWAP of the company’s shares ($1.02).
The release also stated that it “the offer is a best and final offer, and the bidder will not increase the offer price.”
Kangaroo Island Plantation’s share price rose significantly at the beginning of last month, after the company rejected a land purchase deal worth $20 million. The company says its land holdings on the island are worth more than $60 million alone. Company director Keith Lamb said at the time:
While the company is open-minded to approaches it receives, the board is squarely focussed on maximising shareholder wealth and with this in mind, offers are considered on merit. This resolve has not altered since the tragic fires of 2019-20.
Kangaroo Island Plantation share price snapshot
The Kangaroo Island Plantation share price is up 3.2% the past week and 5.6% the past month, but has fallen 11% since 2021 began.