Cerberus May Offer $1.04 billion For Royal Group
Cerberus Capital Management LP is considering making a C$1.32 billion ($1.04 billion) takeover offer for Canada’s Royal Group Technologies Ltd.
Cerberus wants to conduct due diligence on Royal and if it is satisfied with the results, it will make a C$14 ($11.03) per share offer for all of the company’s shares. According to AP.
Cerberus’s offer represents a roughly 15% premium over Royal’s closing stock price of $12.18 Canadian dollars per share ($9.59). As of the end of March, Royal had 94.4 million diluted shares, according to its most recent earnings release.
Cerberus has said that any offer will be subject to certain conditions, including a minimum deposit of at least two-thirds of Royal shares and obtaining regulatory approval. Several shareholders have already agreed with Cerberus to tender up to 18.6 million Royal shares, representing a 19.9 percent stake, and will not withdraw those shares except in certain limited circumstances, Royal said.
Royal Group has formed a committee of board members to consider Cerberus’s proposal. The committee includes Robert Lamoureux, Royal’s interim CFO and lead director, CEO James Sardo, and board members Ralph Brehn, Ronald Slaght and Irvine Hollis.
Royal Group’s shares have dropped 12% over the past year. The company reported a net loss of C$11.4 million, or 12 cents a share, in the first quarter.