Private equity sponsor Advent plans €775m offer for Dutch Mediq

US private equity firm Advent International Corp, via AI Garden BV, a new established wholly-owned subsidiary of funds managed by the company, intends to make a recommended public offer of EUR13.25 (USD17.16) per share in cash for Dutch drug distributor Mediq NV (AMS:MEDIQ), the two parties said in a joint statement today.

The offer, which values the target’s capital at EUR775m, is expected to be launched in the fourth quarter of 2012. It represents a premium of 53% over the closing price of Mediq on 21 September and a 47% premium over Mediq’s average closing price for the last three months. Advent said it would fund the deal via a mixture of debt and equity.

The offer was unanimously agreed by the target’s management and supervisory board. In addition, Advent already secured support from shareholders holding 20.2% of the target’s outstanding share capital.

The offer is conditioned upon securing a minimum acceptance level of 95% of Mediq’s issued and outstanding stock. It is also subject to getting regulatory clearance, among other conditions.

For Advent, the planned acquisition is in line with its strategy to invest in high quality businesses. On the other hand, the buyer is expected to provide support and resources to Mediq, which will help it carry out its growth strategy and cope with the challenges in some markets, the pair said.

Advent has employed Deutsche Bank AG (ETR:DBK), Rabobank Group, BNP Paribas SA (EPA:BNP) as financial advisors, Freshfields Bruckhaus Deringer LLP as legal counsel, Marlborough Partners ltd as debt advisor and FTI Consulting Inc (NYSE:FCN) as communications advisor in connection with the offer. ING Bank NV, ABN AMRO Group NV serve as financial advisors, Allen & Overy LLP as legal counsel and Citigate First Financial as communications advisor to Mediq.

UK insurer Tawa sells stakes in reinsurance firms KX and OX

British insurer Tawa Plc (LON:TAW) said on Monday it had inked a deal to sell its interest in KX Reinsurance Co Ltd (KX Re) and its wholly-owned unit OX Reinsurance Co Ltd (OX Re) to Catalina Holdings Ltd for a maximum of USD30m (EUR23.1m).

Under the terms of the agreement, Catalina will pay a minimum of USD28m in cash plus up to USD2m more based on KX Re’s financial performance till closing. The transaction is awaiting clearance by UK’s Financial Services Authority (FSA) which is expected to be obtained by the year end.

Tawa will use about USD15m of the total proceeds to repay an inter-company loan facility between it and KX Re on closing. The company intends to use the balance to fund new opportunities as well as for further debt repayment and general working capital purposes.

The divestment is part of Tawa’s strategy to shed some of its portfolios, the company said, adding that the previously announced formal sales process of its entire share capital is continuing as planned. Tawa estimates that the disposal of KX Re will reduce its equity by USD19m, if the maximum consideration is received.

Tawa bought KX Re and its wholly-owned unit in May 2007 and March 2011, respectively. Including the sale proceeds, the total value extracted from its investments in the two entities is projected to be USD126m. Last year, the company earned management fees of USD2m from KX Re.

KPMG consulted the vendor on the transaction.

Xstrata board extends deadline to respond to Glencore’s improved offer

British miner Xstrata Plc (LON:XTA) said its independent non-executive directors had extended to 1 October from 24 September the deadline for their response to the increased, final takeover offer from Swiss suitor Glencore International Plc (LON:GLEN) to ensure more time for feedback from the company’s key shareholders.

The request was made by both, Xstrata and Glencore and granted by the UK’s Takeover Panel, the companies said.

The Swiss commodities trader announced on 10 September its final revised offer for Xstrata comprising an exchange of 3.05 own new shares for each Xstrata share, up from the 2.8 exchange ratio agreed in February.

Glencore’s last minute move came after in late August, Qatar Holding with over 12% in Xstrata said it would not accept the terms proposed in February. As the initial transaction was structured, if 16.5% of Xstrata’s shares voted against it, it would have collapsed.
Both companies postponed their shareholders meetings scheduled for 7 September to vote on the deal.

Attached to the increased takeover offer, Glencore also proposed that Xstrata’s current CEO Mick Davis became the CEO of the combined group at the completion of the deal, but he should step down within six months after that and be replaced with Glencore’s current CEO Ivan Glasenberg.

The structure of the transaction will remain a scheme, with the possibility for Glencore to change it into a takeover offer with the approval of the target company and the Panel, the buyer also said.

Under the terms agreed in February, Glencore, owner of 34% in Xstrata, would take the British miner private.

The planned merger is expected to create the world’s fourth biggest diversified natural resource company and a top producer and marketer of 18 commodities, benefiting from larger scale and diversity in the global resources industry, Glencore and Xstrata said at announcing their tie-up in February.