Concerns Over the RBD offer protocol
Quote:
Originally Posted by
Jonboyz
PARTIAL TAKEOVER OFFER FOR RESTAURANT BRANDS AT NZ$9.45 CASH PER SHARE
Finaccess Capital, S.A. de C.V. (Finaccess Capital) is pleased to present to you this recommended partial takeover offer in relation to Restaurant Brands New Zealand Limited (Restaurant Brands). Our NZ$9.45 cash per share offer is in respect of 75% of the fully paid ordinary shares in Restaurant Brands (the Offer). The Offer is being made by our subsidiary, Global Valar, S.L. (the Offeror).
The Offer Document and target company statement (including the Independent Advisers Report) are available for download at www.rbdtakeover.co.nz.
We believe the Offer is a compelling opportunity for shareholders to realise significant value for their investment in Restaurant Brands, with the offer price of NZ$9.45 cash per share representing a 24.3% premium to Restaurant Brands’ last close price prior to announcement of our proposal and a 26.1% premium to the 12 month VWAP at that time.
Each of Restaurant Brands’ independent directors and Stephen Copulos (who is a non-executive director) recommend that you accept our Offer in the absence of an unmatched superior proposal and subject to the Independent Adviser’s Report continuing to conclude that our Offer consideration of NZ$9.45 cash per share is within or above the Independent Adviser’s valuation range of NZ$8.15 to NZ$8.92 per share. Further details of the recommendation are set out in the target company statement.
We have entered into a separate agreement with Mr Copulos, Restaurant Brands’ largest shareholder with a current shareholding of approximately 8.5%. As part of this agreement, Mr Copulos has agreed to accept our Offer for all of the Restaurant Brands shares he holds or controls, subject to directors of Restaurant Brands not withdrawing or qualifying their recommendation of our Offer. Furthermore, all other directors intend to accept our Offer in respect of all of the Restaurant Brands shares that they hold or control, in the absence of an unmatched superior proposal. |
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Some may wonder why I am choosing to express a somewhat critical look at the Mexican RBD takeover. What those that haven't read the offer document in full may not realise is that the 'independent' directors have been gagged. Look at section 10.3(l).ii. There you will find that RBD will be subject to a $7m fine if
"any director of Restaurant Brands fails to recommend the offer, or makes other adverse comments in relation to the offer."
The only exception to this is if the independent report recommendation decides the offer is not fair. I have two real concerns about this.
1/ The independent directors seem to have given the tick of approval of the deal, before the independent report on the transaction has been received. To me that is negligent behavior. They should not have signed up to do this at the behest of the bidder.
2/ It is not the job of independent directors to simply 'box tick' the independent report. As the independent report says in Appendix E
"The most important part of valuation is to evaluate the attributes of the specific company being valued and distinguish it from its peers so as to form a judgement as to where on the spectrum it belongs."
Judgement involves a reasoned valuation of the pros and cons as highlighted in the report , and that the independent directors have not done. The independent directors have disgracefully delegated away their responsibility and authority in my view. I am not saying the deal isn't a good one. But I think the process used to arrive at that good/bad conclusion has been corrupted. Clearly those independent directors do not understand what the word 'independent' means. The directors did not independently evaluate the offer as the quoted text implies. They were told: "You will recommend the offer or the deal is off!"
SNOOPY