A Pepper Group shareholder meeting which will decide the future ownership stakes in the company has been given the green light.
The meeting, which will discuss the proposed acquisition by global equity firm KKR Credit Advisors, was approved on Thursday (12 October) by the Federal Court of Australia. Shareholders will be asked to convene and vote on the bid’s scheme of arrangement which has been sent out in a Scheme Booklet to all Pepper shareholders.
If approved, Pepper will be acquired by Red Hot Australia Bidco, which is indirectly owned by KKR.
The scheme meeting will be held on 15 November where a vote will be taken. If the vote is successful, the scheme will be sent to the courts for approval on 20 November with Pepper shares to cease trading on the ASX on 21 November.
If approved, all shareholders will receive cash payments equal to $3.70 per Pepper share, comprising of cash consideration of $3.60 and a fully franked special dividend of 10 cents per share. Alternatively, eligible shareholders will receive one share in Bidco for each Pepper share they hold or they can retain all Pepper shares wherein Bidco can acquire those shares within a three year time period.
If the acquisition is successful, Bidco intends to retain Pepper’s head office in Sydney as well as the firm’s present employees, including the senior management team. It has not confirmed proposed members of the board however.
“Bidco currently intends to continue Pepper’s focus on offering a unique, diversified, global portfolio of financial services, including lending, asset servicing and advisory across the residential and commercial property sectors as well as in consumer, auto and equipment finance,” the scheme booklet said.
Pepper’s directors have recommended that shareholders vote in favour of the resolution and approve the scheme at the upcoming meeting, chairman Seumas Dawes wrote in a letter to shareholders on Friday (13 October). Pepper’s directors hold approximately 34.2% of all Pepper shares on issue.
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