The Credible Labs Inc (ASX: CRD) share price looks set to storm higher this morning after the San Francisco-based consumer finance marketplace operator announced that it has entered into a definitive merger agreement with a subsidiary of Fox Corporation.
What are the terms of the merger?
According to the release, the merger agreement will see shareholders receive A$2.21 cash per CDI, which represents A$55.25 per share of common stock in Credible.
This is a premium of just 7.3% to the last close price for its shares of $2.06. Though, the company points out that it is a 12.4% premium to the volume weighted average price since Credible's quarterly activities report on July 31 and a 30.8% premium to the closing price on the day prior to the receipt of Fox's initial confidential proposal on May 29.
The transaction remains subject to a number of customary closing conditions, including approval by a majority of Credible shareholders and obtaining all regulatory approvals including certain approvals from the ASX.
Transaction unanimously recommended.
The release explains that the board established a special committee consisting solely of independent and disinterested directors to review, evaluate, and negotiate any offer and to recommend or not recommend board approval.
The review concluded that the consideration to be paid in connection with the transaction to shareholders is fair from a financial point of view, subject to various assumptions and qualifications.
The board advised that it believes shareholders should vote in favour of the transaction due to the significant premium, attractive revenue multiples, the certainty of value it offers, its minimal conditionality, and the reduced uncertainty it provides.
Credible's chairman, Ron Suber, said: "The Board, acting on the unanimous recommendation of the Special Committee, believes the proposed transaction is in the best interests of the Company and its shareholders – and unanimously recommends shareholders vote in favour of the transaction. Credible has achieved significant success since its inception. This proposed partnership with Fox will enable Credible to further innovate on its consumer offering and position itself as a leading independent personal finance marketplace in the United States."
Mergers and acquisitions activity certainly is high at the moment with the likes of Credible Labs, Cynata Therapeutics Ltd (ASX: CYP), GBST Holdings Limited (ASX: GBT), and Wellcom Group Limited (ASX: WLL) all receiving takeover approaches recently.
