LA Private

TPG’s successful bid: Invocare agrees to $1.8 billion buyout offer after months of negotiations

Private equity group TPG has achieved a significant breakthrough, securing the agreement of funerals group InvoCare for a buyout deal, marking the end of a five-month pursuit.

Today, InvoCare (ASX:IVC) announced its acceptance of a $1.8 billion acquisition offer from TPG, which will provide $2.70 per share, a departure from the initial pitch of $12.65, rejected in March due to perceived inadequacy in shareholder value.

The revised $12.70 offer incorporates “a fully franked special dividend of up to 6 cents per InvoCare share,” as outlined in the ASX statement released on Wednesday.

InvoCare claimed, “For InvoCare shareholders who can utilise franking credits, the Cash Consideration, when combined with the benefit of franking credits, implies a value of up to approximately $12.96.”

The announcement spurred a more than 5% increase in shares, reaching $12.43 by 11 a.m.

The default offer consists of an all-cash consideration, noted InvoCare, with alternative options involving scrip holdings in the bidding vehicle.

“Under the Scheme, the default consideration is the All Cash Consideration. Shareholders who do not opt for a scrip consideration will receive the All Cash Consideration. Alternatively, shareholders can choose from various scrip consideration options, allowing them to maintain an interest in InvoCare post-Scheme implementation.”

InvoCare presented five choices varying in scrip and cash components, contingent on support from shareholders. The minimum support threshold stands at 5% of scrip in the bidding vehicle, Hold Co, at the scheme’s implementation date.

The Board of InvoCare unequivocally recommended that shareholders vote in favour of the Scheme, except if a superior proposal emerges. This recommendation remains conditional on an independent expert’s ongoing endorsement of the scheme’s alignment with InvoCare shareholders’ best interests.

“Subject to these same qualifications, all directors intend to vote all the InvoCare shares in which they have a relevant interest in favour of the Scheme. However, the Board refrains from offering a recommendation concerning the scrip consideration.”

This week, private equity players notched a second victory, with Bain securing Estia, an aged care home operator, through an $838 million buyout.