Reporting
Busy Bees enters Think takeover fray, offers $1.75 a share, topping Alceon by 29.6%
Jason Roberts
Nov 23, 2020
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Busy Bees Early Learning Australia has made an unsolicited, conditional, non binding proposal to purchase all of Think Childcare’s outstanding securities for $1.75 in cash, just one week after the company received a $1.35 per security bid from the private equity arm of Australian investment manager Alceon Group Pty Ltd.
The indicative price offered by Busy Bees represents a 29.6 per cent premium to Alceon’s offer and a 40.0 per cent premium to the closing price of Think shares on Friday 13th November, the last day of trading before the initial bid was announced.
From a valuation perspective the new offer values the bid at around an enterprise value (EV) to earnings before interest tax depreciation and amortisation (EBITDA) multiple of 6.75x FY2020 EBITDA guidance which compares to 5.2x offered by Alceon.
The proposal will now be reviewed by Think’s Independent Board Committee (IBC), which was formed following the receipt of the Alceon proposal, and has now commenced its assessment of the offer from Busy Bees.
Notably, the IBC has notified Alceon of the Indicative Proposal and notes Alceon's matching right under clause 4.7of the Process Deed executed and announced to ASX on 16 November 2020.
The Busy Bees proposal is subject to a range of conditions that include:
- The termination of the process deed with Alceon;
- Completion of satisfactory due diligence;
- Entry into scheme implementation agreement on customary terms and conditions, including:
- A unanimous recommendation from the board of directors for TNK Group security holders to vote in favour of the scheme;
- Typical deal protection and exclusivity arrangements (including a break fee, no talk, no shop, matching rights and notification provisions) and
- Final approval of the Busy Bees board, which includes representatives of the Ontario Teachers’ Pension Plan Board.
The statement also notes that Think security holders do not need to take any action in relation to either the Alceon Proposal or the Busy Bees proposal at this stage.
Busy Bees Early Learning Australia owned and operated 64 long day care centres in Australia as at 30 June 2020 and is part of global early education and care provider the Busy Bees Group which has operations in Ireland, the United Kingdom, Canada, Singapore, Malaysia, Vietnam and China, in addition to Australia with over 600 centres worldwide.
To read a full copy of the announcement please click here.
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