Insights

Citadel (ASX:CGL) share price flat as scrip offer approved

The Citadel share price is flat this morning as the company announced its shareholders have approved the all-scrip takeover offer from PEP.
The post Citadel (ASX:CGL) share price flat as scrip offer approved appeared first on Motley Fool Australia. –

asx share price vote represented by lots of hands up in the air

Citadel Group Ltd (ASX: CGL) announced today that its shareholders have approved the all-scrip offer from private equity group, Pacific Equity Partners, as an alternative to the all-cash $5.70 per share takeover offer. At the time of writing, the Citadel share price is trading flat at $5.67.

About the Citadel takeover

In September, investors scrambled to buy up the Citadel share price after the company announced it had received a takeover approach from Pacific Equity Partners (PEP).

The proposed offer at the time was for an all-cash price of $5.70 per share, a 43% premium on the Citadel share price at that time. The offer valued Citadel’s equity at $448.6 million and enterprise value at $503.1 million. The Citadel share price jumped by 35% on the news that day. 

However, the terms of the bid also gave shareholders the option to take a scrip alternative to enable them to retain an indirect interest in the business. In this alternative proposal, they can choose either all-cash, all-scrip or a combination of the two.

Today’s voting results have validated shareholders’ wish for the alternative scrip proposal.

Management backing

The company’s directors have been supportive of the offer and recommended that shareholders vote in favour of the scheme.

Citadel board chair, Peter Leahy, said this about the takeover offer:

The PEP offer is an attractive transaction which provides an all-cash option for Citadel shareholders. The Citadel board has unanimously concluded that the scheme represents a compelling outcome for our shareholders, customers, suppliers, and staff.

It is worth noting that the cash offer price of $5.70 is a significant discount to where the Citadel share price was trading in November 2018. At that point the company’s shares were trading at over $9. Furthermore, it’s actually lower than the company’s February high of $5.92. 

Next steps

An all-scrip scheme is unusual for a private equity buyout, however under the terms of this scheme, shareholders can elect to take scrip in Pacific Group Topco Limited,  a private holding group set up to own Citadel’s shares. 

The Citadel directors have today reiterated their recommendation that Citadel shareholders approve the offer, in the absence of a superior proposal, and subject to the independent experts continuing to conclude that the scheme is in the best interest of Citadel shareholders.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

See The 5 Stocks

*Returns as of June 30th

More reading

Motley Fool contributor Eddy Sunarto has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Citadel (ASX:CGL) share price flat as scrip offer approved appeared first on Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!