Fuhrer family pulls out of Goldshield bidding following latest management offer
This article was originally published in Scrip
Goldshield's management appears to have trumped the Fuhrer family and former Goldshield CEO Ajit Patel in the battle for control of Goldshield Group with a bid valuing the UK firm at £178 million and the support of a large contingent of its shareholders.
AIT, the Fuhrer family's investment vehicle, has pulled out of the bidding following an increased offer of 485 pence per share in cash on October 25th by Midas Bidco, the management's bidding company. AIT had previously offered 480 pence per share, but it has now withdrawn that offer.
Combining its own stake in Goldshield with those of shareholders who had pledged to back its offer and reject any scheme of arrangement or contractual offer from AIT, Midas Bidco had secured support from 45.15% of the company's ownership by the time it issued its 485 pence bid. Claiming verbal support from another 5% represented by Goldshield's employee benefit trust, Midas noted that AIT would be unable to implement any scheme of arrangement to acquire Goldshield, and would find it challenging to succeed with any contractual (ie conditional) offer below 525 pence per share, even if it only had the minimum 50% acceptance condition allowed by regulations. This is because Midas backers holding 8.24% of Goldshield's shares stated that they would only support an alternative bid if it offered 525 pence or more, while others said they would refuse to entertain any other bid unless it was wholly unconditional.
AIT offered 480 pence per share for Goldshield on October 2nd after Midas bid 460 pence per share on September 25th. Prior to that, AIT had offered 440 pence per share on 18th September, upping this to 450 pence six days later when faced with the likelihood of Midas's counterbid (scripnews.com, September 25th, 2009).
The committee of independent directors set up by Goldshield to examine offer proposals noted that it was not allowed to recommend an offer from any party apart from AIT until five business days from its announcement – this was a stipulation of its original agreement with AIT when it recommended the latter's bid on September 18th. It said it would make a further announcement in due course.