Silk Logistics Holdings (ASX:SLH) has entered into a Scheme Implementation Deed with DP World Australia Limited for the acquisition of 100% of its issued share capital through a scheme of arrangement. The proposed transaction values Silk’s equity at approximately $174.5m, with shareholders set to receive cash consideration of $2.14 per share, less any dividends declared before the scheme’s completion.
Silk is an Australian logistics and supply chain solutions provider known for its integrated port-to-door logistics services. It offers transport, warehousing and distribution solutions across Australia. The acquisition by DP World Australia, a leading terminal operator and logistics company in Oceania, aligns with the latter’s strategy to strengthen its capabilities in end-to-end supply chain services. The scheme represents a 45.6% premium to Silk’s last closing share price of $1.47 on 8 November 2024, and a 60.6% premium over its one-month volume-weighted average price (VWAP) of $1.33.
The Silk board has unanimously recommended that shareholders support the scheme, conditional upon the absence of a superior proposal and the Independent Expert’s conclusion that the scheme is in the best interests of shareholders. Major shareholders representing approximately 46% of Silk’s shares, including Tor Asia Credit Master Fund LP and entities linked to Silk CEO John Sood and Brendan Boyd, have already committed to voting in favour.
Silk Chair Terry Sinclair remarked, “The Board has carefully considered the proposal from DP World Australia and believes it represents compelling value.” CEO John Sood added, “Today is an important and exciting day in the history of Silk. The proposed transaction recognises the significant investment that Silk has made… We see strong strategic and cultural alignment between Silk and DP World Australia.”
DP World Australia, whose parent company DP World operates one of the world’s largest marine terminal networks, noted that the acquisition would enhance its ability to offer comprehensive logistics solutions across the region. Glen Hilton, CEO and Managing Director of DP World Asia Pacific, commented, “Combining DP World Australia’s terminal operations with Silk’s value-add services enhances our capability to deliver enhanced solutions for customers and to create sustainable value for all stakeholders.”
The scheme’s completion is contingent on approvals from the Foreign Investment Review Board (FIRB), ASIC, ASX, and the Court, alongside a shareholder vote, expected in Q3 FY2025.
Shares in Silk have soared 40.82% to $2.07 on the back of the news.