Australian (ASX) Stock Market Forum

CGC - Costa Group Holdings

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Possibly another great Aussie company takeover by international interests.

Very sad, we keep selling off businesses with great potential during a few years of hard times.

Anyone read the article about Australia's beer industry?

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Carlton & United Breweries and Lion Nathan, both Japanese owned, control about 80 to 85 per cent of the local beer brewing market.​
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CUB earns extraordinary profit margins of about 40 per cent in Australia from selling popular beers such as Victoria Bitter and Carlton Draught.​
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Lion, brewer of XXXX and Toohey’s, is owned by Japan’s Kirin.​
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Their profit margins dwarf the 5 per cent to 6 per cent profit margins of supermarkets Coles and Woolworths whose profits have faced intense public scrutiny as households come under cost-of-living pressures.​
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JohnDe said:
Possibly another great Aussie company takeover by international interests.

Very sad, we keep selling off businesses with great potential during a few years of hard times.

Anyone read the article about Australia's beer industry?

​
Carlton & United Breweries and Lion Nathan, both Japanese owned, control about 80 to 85 per cent of the local beer brewing market.​
​
CUB earns extraordinary profit margins of about 40 per cent in Australia from selling popular beers such as Victoria Bitter and Carlton Draught.​
​
Lion, brewer of XXXX and Toohey’s, is owned by Japan’s Kirin.​
​
Their profit margins dwarf the 5 per cent to 6 per cent profit margins of supermarkets Coles and Woolworths whose profits have faced intense public scrutiny as households come under cost-of-living pressures.​
​
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kept on dithering on pulling the trigger here


MAYBE if this deal fails ( say FIRB stops it )
 
expect Norge to lend out shares to short-term traders , they have done it before so maybe they will do it again
 
Management wants shareholders to sell, they reckon the $3.20 offer is 25% higher than the 30 June 2023 of $2.57 market price.

Today's price is down a little, to $3.155

Australian company mangers are so quick to sell out, and cheap.

Costa Group Holdings (Costa) shareholders are being asked to vote at a Scheme meeting, relating to the proposed acquisition of all of the issued shares in Costa Group Holdings Limited by Paine Schwartz Partners, LLC ("PSP"), Driscoll's, Inc ("Driscoll's") and British Columbia Investment Management Corporation ("BCI") (together, referred to as the "Consortium"), that the Consortium and its Associates do not already own, via Chilli Buyer Pty Ltd (ACN 670 569 678) ("Bidco"), an entity to be controlled by the Consortium as at the Implementation Date1.

On 22 September 2023, Costa announced it had entered into a Scheme Implementation Agreement with Bidco, an entity controlled by the Consortium as at the Implementation Date, under which Bidco has agreed to acquire all of the issued shares in Costa, that the Consortium and its Associates do not already own, at a price of $3.20 per Costa Share by way of a scheme of arrangement.

The Independent Expert, Kroll, has concluded that the scheme is FAIR AND REASONABLE and in the BEST INTERESTS of Costa Shareholders (other than Excluded Shareholders), in the absence of a Superior Proposal. To date no Superior Proposal has emerged. The Independent Expert has assessed the value of a Costa Share on a 100% controlling interest basis to be in the range of [$2.62] to [$3.28], and the Scheme Consideration price falls within the Independent Expert's range.

The reasons why the Independent Expert reached these conclusions are set out in the Independent Expert's Report, a copy of which is included in Annexure A of the Scheme Booklet. The Costa Directors encourage you to read this report in its entirety.

COSTA DIRECTORS' RECOMMENDATION

Your Costa Directors consider that the Scheme is in the best interests of Costa Shareholders (other than Excluded Shareholders) and unanimously recommend that you VOTE IN FAVOUR of the Scheme, in the absence of a Superior Proposal and subject to the Independent Expert continuing to conclude that the Scheme is in the best interests of Costa Shareholders (other than Excluded Shareholders). Subject to the same qualifications, each of your Directors who holds or controls Costa Shares intends to vote in favour of the Scheme in relation to all Costa Shares held or controlled by them.

The key reasons for your Directors' recommendation of the Scheme are set out in Section 1.1 of the Scheme Booklet. In particular:
  • The all cash consideration provides Costa Shareholders certainty in an uncertain operating environment at an attractive premium by delivering cash proceeds to Costa Shareholders.
  • Implementation of the Scheme would mean that Costa Shareholders would no longer be exposed to the current and future risks relating to the ongoing execution of Costa's business growth plan.
  • The Independent Expert has concluded that the Scheme is in the best interests of Costa Shareholders (other than Excluded Shareholders), in the absence of a Superior Proposal.
  • No Superior Proposal had emerged as at the date of the Scheme Booklet.
  • If the Scheme is voted down and does not proceed, in response the Costa Share price may fall, perhaps materially.
  • Brokerage charges and stamp duty will not be imposed on Costa Shareholders in respect of the transfer of Costa Shares under the Scheme.
These reasons should be considered along with the summary of the key risks associated with the Scheme set out in Section 1.2 of the Scheme Booklet.

SCHEME CONSIDERATION

If the Scheme is implemented, Costa shareholders will be entitled to receive the Scheme Consideration of $3.20 per Costa Share2. The Scheme Consideration represents a price for each Costa Share that is:
  • 43% higher than the closing share price on 25 October 2022 of $2.23 per Costa Share, which represents the last closing share price prior to PSP acquiring a 13.78% Relevant Interest in Costa;
  • 23% higher than the price of $2.60 per Costa Share, the price at which PSP acquired a 13.78% Relevant Interest in Costa on 25 October 2022;
  • 18% higher than the closing share price on 30 June 2023 of $2.72 per Costa Share; and
  • 25% higher than the volume weighted average price of Costa shares for the 3-month period to the closing share price on 30 June 2023 of $2.57 per Costa Share.
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Further to the announcement made yesterday, Costa Group Holdings Limited (ASX: CGC) (“Costa”) is pleased to announce that an office copy of orders made by the Federal Court of Australia (“Court”) approving the proposed scheme of arrangement under which Paine Schwartz Partners, LLC, Driscoll’s, Inc and British Columbia Investment Management Corporation (together the “Consortium”), will acquire all of the ordinary shares in Costa that the Consortium and its Associates do not already own (“Scheme”) has been lodged with the Australian Securities and Investments Commission (“ASIC”) pursuant to section 411(10) of the Corporations Act 2001 (Cth).1 ​
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An office copy of the Court orders lodged with ASIC is annexed to this announcement. The Scheme is now legally effective and it is expected that trading in Costa Shares will be suspended from close of trading today, Thursday 8 February 2024. ​
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On the Implementation Date for the Scheme (expected to be 26 February 2024), all Costa Shareholders (including Costa Shareholders who did not attend the Scheme meeting or did not vote in favour of the Scheme, but excluding Excluded Shareholders) will receive $3.20 for each Costa Share they hold as at 7.00pm (AEDT) on 12 February 2024.​
 
On February 27th, 2024, Costa Group Holdings Limited (CGC) was removed from the ASX's Official List in accordance with Listing Rule 17.11, following implementation of the scheme of arrangement between CGC and its shareholders in connection with Paine Schwartz Partners, LLC, Driscoll’s, Inc and British Columbia Investment Management Corporation (together the "Consortium") acquiring all of the issued shares in CGC the Consortium and its associates did not own.
 
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