BINGO (ASX:BIN) share price charges 7% higher on takeover agreement

The BINGO Industries Ltd (ASX:BIN) share price on Tuesday after reaching an agreement with MIRA regarding the takeover of BINGO…
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asx share price rising on deal represented by hand shake

The BINGO Industries Ltd (ASX: BIN) share price is charging higher on Tuesday.

At the time of writing, the waste management company’s shares are up 7% to $3.43.

Why is the BINGO share price charging higher?

This morning BINGO announced that it has entered into a Scheme Implementation Deed with Recycle and Resource Operations, an entity owned by Macquarie Infrastructure and Real Assets (MIRA), for the acquisition of all of the issued shares in BINGO pursuant to a scheme of arrangement.

According to the release, if the scheme is implemented, BINGO shareholders will receive a total cash consideration of $3.45 per share less any special dividend declared and paid to shareholders on or before the date of implementation.

As things stand, the company expects a special dividend to be in the order of $0.117 per share and fully franked, resulting in franking credits of approximately $0.05 per BINGO share.

While this takeover offer is only a modest premium to the latest BINGO share price, it is worth noting that the deal has been in the works since January. 

In fact, it represents a 26% premium to the last undisturbed closing price of the BINGO share price on 18 January of $2.74.

Alternative offer

Macquarie Infrastructure and Real Assets has also offered BINGO shareholders the option to receive a mix of cash and unlisted scrip.

This will be a total of $3.30 per share, comprising $1.32 in cash and the remainder unlisted scrip in Recycle and Resource Holdings.

Additionally, BINGO shareholders choosing for this option will be eligible for the earn-out dividend of up to $0.80 per share.

Unanimously recommended

The release explains that BINGO’s Independent Board Committee (IBC) and recommending directors unanimously recommend that shareholders vote in favour of the scheme.

This is in the absence of a superior proposal and subject to an independent expert concluding (and continuing to conclude) that the scheme is fair and reasonable and in the best interests of shareholders.

Subject to those qualifications, BINGO’s recommending directors, which hold or control 31.57% of BINGO shares on issue, each intend to vote in favour of the scheme.

BINGO’s IBC Chairperson, Elizabeth Crouch, said: “The IBC is pleased to have reached unanimous agreement with MIRA on this proposal. The IBC has concluded that the Scheme is in the best interests of BINGO’s shareholders.”

“The IBC has explored a number of alternatives, including standalone value creation opportunities and alternative bidder interest. After considering future opportunities for the business, along with economic, regulatory and execution risks, the IBC has unanimously concluded that the Scheme is a compelling option which realises attractive value for our shareholders,” Ms Crouch said.

Following today’s gain, the BINGO share price is now up 38% since the start of the year. 

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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