Johns Lyng Group Ltd (ASX: JLG) shares are taking off on Wednesday morning after returning from a trading halt.
At the time of writing, the ASX 300 share is up 18% to $3.01.
This compares favourably to a 0.5% gain by the S&P/ASX 300 index.
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Why is this ASX 300 share rocketing?
Firstly, before covering its strong gain today, let's dig deeper into what Johns Lyng Group actually is.
It describes itself as an integrated building services group delivering building and restoration services across Australia and the US.
It notes that its core business is built on its ability to rebuild and restore a variety of properties and contents after damage by insured events including impact, weather, and fire events.
Investors have been buying this ASX 300 share today after it confirmed media speculation that it was a takeover target.
According to the release, almost a month ago Johns Lyng received a non-binding indicative offer proposal from Pacific Equity Partners (PEP), on behalf of funds it advises, to acquire 100% of the issued shares of the company by way of a scheme of arrangement.
It notes that certain members of its senior management team, including the ASX 300 share's largest shareholder, Scott Didier, managing director and CEO, are being offered the opportunity to receive scrip consideration to retain an interest in the business.
What's next?
An Independent Board Committee, comprising non-executive chair, Peter Nash, and non-executive directors, Peter Dixon, Alison Terry and Alexander Silver was formed following the receipt of the indicative proposal.
The Independent Board Committee has decided to grant PEP a period of exclusivity to facilitate its confirmatory due diligence process to enable it to put forward a binding offer.
This period of exclusivity expires on 11 July 2025, during which the customary fiduciary exception will not apply for the four weeks commencing 29 May.
What has been offered?
Unfortunately, the one thing missing from this announcement has been the value of the offer that PEP has made to take over the ASX 300 share. The company has only stated the following:
Shareholders do not need to take any action in relation to the Indicative Proposal. It should be noted that there is no certainty that the discussions with PEP will result in any transaction and no assurance is given that a transaction will proceed. Any such transaction would require approval by JLG's Independent Board Committee, and be subject to approval from the Foreign Investment Review Board and ultimately subject to approval from JLG's shareholders and the Court (among other conditions).
Investors will need to stay tuned and wait for PEP to make a binding offer to find out what is being tabled.
