The United Malt Group Ltd (ASX: UMG) share price is rocketing 31.7%, currently trading for $4.53 per share.
Shares in the S&P/ASX 200 Index (ASX: XJO) maltster were placed in a voluntary trading halt yesterday, pending the company's response to a takeover proposal.
The United Malt share price closed on Friday at $3.44.
Here's what the company released on the takeover offer this morning.
Image source: Getty Images
What's happening with the takeover proposal?
The United Malt share price is flying higher after the company reported it's entered into a process and exclusivity deed with French maltster Malteries Soufflet.
Malteries Soufflet is the largest commercial maltster in Europe and the second-largest maltster in the world.
And Malteries Soufflet has submitted a conditional, non-binding, and indicative proposal to acquire all of United Malt's stock for $5.00 per share in cash. That's a heady 45% above the United Malt share price at Friday's close.
If United Malt pays out any dividends before the proposed transaction is completed, the $5.00 per share offer price will be adjusted accordingly.
With 299.18 million United Malt shares outstanding, the deal values the ASX 200 maltster at just under $1.5 billion. On Friday, the company's market cap was quoted at $1.01 billion.
United Malt today reported that Malteries Soufflet and its major shareholder, the InVivo Group, had previously approached it with unsolicited offers to combine the companies. United Malt provided them with limited non-public information on a confidential and non-exclusive basis.
Malteries Soufflet then submitted several confidential, non-binding, and indicative proposals to acquire all of United Malt shares.
On 16 December, Malteries Soufflet offered $4.15 in cash per share. On 6 February, it offered $4.50 in cash per share; on 8 March, it offered $4.90 in cash per share. Then, on 14 March, it submitted the indicative proposals, valuing the United Malt share price at $5.00.
United Malt has granted Malteries Soufflet the opportunity to conduct due diligence on an exclusive basis for a 10-week period.
Should Malteries Soufflet provide a binding proposal for at least $5.00 per share, the United Malt board said it would unanimously recommend shareholders vote in favour of the potential transaction, in the absence of a superior proposal.
United Malt shareholders do not need to take any action at this time, the company advises.
United Malt has also appointed Macquarie Capital as its financial adviser.
United Malt share price snapshot
As you can see in the chart below, today's big boost has put United Malt stock up 33% in 2023.
