COMMERCIAL Comeng, Wm Adams in merger talks
(N.Z.P. A.-Reuter—Copyright) SYDNEY”. Comeng Holdings, Ltd, Australian locomotive and rolling-stock manufacturer, has made a take-over offer for William Adams and Company, Ltd. engineer and metal distributor, valuing it at SAust2s.3m or 22.6 per cent more than pre-offer market capitalisation.
A letter from Comeng to William Adams indicates that the offer is being made after preliminary discussions between the companies. Part of the letter has been made public “so that continued discussions can be conducted in an environment of an informed market,” the chairman of Comeng (Mr D. Pratten) says. The offer is one Comeng
share plus 75c cash for each of the 8,955,000 issued shares of William Adams. Based on the last sale on Thursday of 207 c for Comeng shares the bid values each William Adams share at 282 c which compares with its last sale-price of 230 c. A merged-group resulting from the offer, based on 1975 accounts, would have total assets of about s9sm, share-
holders’ funds of about s46m, and issued capital of $12.6m in 50c shares. Based on combined 1975 earnings, and after adjustment for subsequent issues and other items, the net pro-! fit of the merged group is estimated at sB.4m, and earnings per share at 33.5 c, providing 3.4 times cover for the proposed dividend of 10c a share. It is intended that William Adams retain its identity, under existing management and staff.
Apart from an expansion of the Comeng and William Adams boards of directors, it is intended there would be no change in current board positions if the offer is successful.
The strength of the combined group would arise primarily from the widespread sources of income derived from activities with differing business cycles. The merged group, Australian owned and controlled, would rank within Australia’s top 100 listed public accompanies in terms of capitalisation, based on current market prices. It would have about 6500 shareholders, and 3000 employees in Australia. The offer is conditional on 90 per cent acceptance, but Comeing reserves the right to accept a lower acceptance level.
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Bibliographic details
Press, Volume CXVI, Issue 34149, 10 May 1976, Page 18
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345COMMERCIAL Comeng, Wm Adams in merger talks Press, Volume CXVI, Issue 34149, 10 May 1976, Page 18
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