Credit Corp Group Ltd (ASX: CCP) has lobbed a takeover bid for Humm Group Ltd (ASX: HUM), valuing the company at near the high water mark for its shares over the past year.
Both companies made statements to the ASX on Wednesday admitting that early-stage talks were underway.
Humm Group said in its statement that on November 19, the company "received a confidential, conditional, non-binding indicative proposal from Credit Corp to acquire 100% of the shares in the company''.
Confidential talks underway on ASX takeover bid
Humm Group said it had been in discussions with Credit Corp since the proposal was launched.
The company said Credit Corp was offering 77 cents in cash per Humm Group share, but if that offer was unsuccessful, Credit Corp would then launch an off-market takeover at 72 cents per share, "conditional upon Credit Corp achieving acceptances for 50.1% of Humm Group's shares''.
Humm Group added:
The Humm Group board, with the assistance of its financial and legal advisers, is carefully evaluating Credit Corp's proposal. Directors are committed to acting in the best interests of all Humm Group shareholders and are open to supporting a proposal that they believe represents appropriate value for shareholders. The board is prepared to work constructively with Credit Corp to see if a proposal can be developed that it is prepared to recommend for consideration by the shareholders.
The Humm Group board said it had told Credit Corp it was willing to engage on the proposal and had offered to provide the opportunity for it to conduct due diligence, with discussions ongoing about a suitable non-disclosure agreement to cover those talks.
No formal bid at this stage
The board added that the proposal was at this stage "non-binding and incomplete", and that "Credit Corp has expressly stated that the proposal does not constitute a proposal to make a takeover bid for the purposes of the Corporations Act''.
Humm Group shares shot 9.1% higher after the proposal was made public, trading at 72 cents. The company's shares have traded as high as 78 cents over the past year and as low as 43 cents.
Credit Corp shares on Wednesday were 1.3% lower at $13.76.
Humm Group said in the same statement that it had received a section 203D notice seeking to remove three of the company's directors from the board, although a resolution to call a meeting to move such a motion had not been filed.
Humm Group was valued at $330 million at the close of trade on Tuesday, while Credit Corp was valued at $948.9 million.
