The Trilogy International Ltd (ASX: TIL) share price is likely to be amongst the biggest movers on Friday after the New Zealand-based personal care company received a takeover approach.
What was the offer?
According to the release, the company has entered into a scheme implementation agreement with CITIC Capital China Partners. Under which it is proposed that a wholly-owned subsidiary of CITIC Capital will acquire all Trilogy shares for NZ$2.90 (A$2.64) cash per share.
The scheme is conditional on the approval of Trilogy's shareholders, the High Court, and the New Zealand Overseas Investment Office.
While this offer equates to a premium of 23.3% on the last close price, it is worth noting that Trilogy's shares were trading as high as A$3.00 in August of this year.
But management appears to be in favour of the deal and intends to unanimously recommend it if the independent adviser concludes that the offer is within or above its valuation range, and no superior proposal arises.
Furthermore, The Business Bakery, which holds 31.2% of the shares on issue, intends to vote in favour of the scheme on the same terms as above.
What now?
Although the offer is on a reasonably lofty EV/EBITDA multiple of 13.6x, I still can't help but feel that it is opportunistic given its share price decline over the last few months.
However, with major shareholders and management planning to vote in its favour, it looks close to a done deal.
Investors may want to consider taking profit today and reinvesting the funds in fast-growing industry peer BWX Ltd (ASX: BWX).
