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.
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.
