The minority of Quintain Estates & Development shareholders that have not yet accepted Lone Star’s £700m bid for the company have been given a further two weeks to sell their stakes.
Lone Star announced that it had secured the backing of more than 53% of shareholders at the first close of its 131p per share offer on 9 September, putting it in a strong position to complete the takeover.
The Dallas-based private equity company’s original offer document stated the bid would go unconditional once 90% of shareholders had approved it.
However, Lone Star’s offer document retains the right to declare the offer unconditional at a lower threshold.
If this happens, the remaining shareholders would be given a 14-day window to choose whether to sell their shares or face the prospect of retaining minority stakes in a listed company that would be majority owned by Lone Star.
Should more than 10% of shareholders still choose not to sell, Lone Star would have the option to pursue the purchase of the majority of shares in what would remain a listed company, to up its offer or to walk away from the bid altogether.
In such situations bidders rarely raise their offers given the perceived unattractiveness for small shareholders of retaining a stake in a listed company that is majority owned by one party.
Shareholders that have not yet accepted the offer are likely to have been waiting to see if a higher offer for the company materialised from a rival bidder.
Quintain’s share price briefly exceeded the 131p offer price in the weeks immediately following the 29 July bid going public, on expectations that a rival bid could come forward.
However the company’s share price has since slipped back as confidence in the prospects of a rival bid waned.
The two-week extension of the original offer closes on 23 September.
Quintain’s management team, which owns a 0.3% stake, has recommended the bid to shareholders and agreed to sell its stake to Lone Star.
