The HRL Holdings Ltd (ASX: HRL) share price has climbed to a 52-week high on Thursday.
In morning trade, the testing services company's shares jumped a further 10% to 16.5 cents.
When the HRL share price reached that level, it had doubled in value over the last two trading sessions.
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Why is the HRL share price surging higher?
Investors have been bidding the HRL share price higher today after the company announced an agreement with industry giant ALS Ltd (ASX: ALQ) regarding a takeover.
According to the release, the two parties have entered into a bid implementation agreement under which ALS will acquire all of the HRL shares it does not already own by way of an off-market takeover at 16 cents cash per share.
This follows yesterday's announcement, which revealed that ALS had tabled an unsolicited, non-binding indicative offer.
The two parties have also agreed to a deal protection regime that includes no shop and no talk rights. Furthermore, ALS has a right to match any superior offers and HRL has agreed a break fee of $800,000.
'A very good outcome' for shareholders
The HRL board is advising shareholders to accept the offer, subject to there being no greater offer made from a third party.
HRL's non-executive chair, Greg Kilmister, believes the offer is a very good outcome for shareholders. He commented:
The HRL Board is unanimous in its view that this transaction is in the best interests of HRL shareholders. In making this assessment, the Board has carefully considered a range of matters including its view of the intrinsic value of HRL taking into account the company's current position and future prospects, and the certainty for shareholders of this all-cash offer. We believe this transaction is a very good outcome for HRL's shareholders, and for stakeholders more broadly, including our customers, staff and suppliers.
