InvoCare Ltd (ASX: IVC) shares are soaring today, up 10.82%.
S&P/ASX 200 Index (ASX: XJO) funeral services provider closed on Friday trading for $11.09 per share. Shares are currently changing hands for $12.29 apiece.
This comes on news that private equity firm TPG Capital Global has lobbed an improved takeover proposal for InvoCare. TPG's initial proposal was reported on 7 March. InvoCare shares closed up 35% on the day.
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What is TPG's new takeover offer?
InvoCare shares are once more leaping higher on today's news of the revised proposal.
The conditional, non-binding, and indicative proposal would see TPG acquire all InvoCare shares for $13.00 per share in cash by way of a scheme of arrangement.
That's 35 cents per share more than the $12.65 offered under the initial proposal. That proposal was withdrawn on 24 April.
The revised proposal equates to an equity value of approximately $1.9 billion and an enterprise value of some $2.2 billion.
Management notes this is a 45.3% premium to InvoCare's undisturbed closing share price of $8.95 per share on 6 March 2023, the day before the initial takeover offer was reported.
And it's 17% higher than Friday's closing price.
Under the revised proposal, InvoCare will also be allowed to pay a fully franked special dividend before the takeover is completed. The company expects that to be around 60 cents per share.
The amount shareholders will receive will be reduced by the amount of the special dividend. However, thanks to the potential tax benefits, stockholders who can utilise the franking credits could see their shares worth around $13.25 apiece.
InvoCare's board has agreed to grant TPG the opportunity to conduct due diligence for five weeks on an exclusive basis.
Should TPG come back with a binding proposal of at least $13.00 per InvoCare share, the board said it intends to unanimously recommend shareholders vote in favour, barring a superior proposal.
Shareholders do not need to take any action at this point.
How have InvoCare shares been tracking?
With today's big intraday leap factored in, InvoCare shares are up a healthy 12% so far in 2023. That handily outpaces the 4.3% year-to-date gain posted by the ASX 200.
