Firm advises on $235m infrastructure takeover bid

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Gilbert + Tobin has advised Crescent Capital on its $235m proportional takeover bid for Cardno Limited.

Crescent’s bid for Cardno, an ASX-200 professional infrastructure and environmental services company, was initially hostile but the companies entered into an implementation agreement, where a minimum of 40 per cent of the company would remain listed following negotiations. 

“A proportional structure bid is not a structure that you see very often; in fact they are extremely rare,” lead partner on the deal Tim Gordon told Australasian Lawyer.

“It resulted in a situation where Crescent was able to increase its investment income and now work together with the remaining Cardno shareholders, of whom many are employees, to grow the business for the next few years rather than taking it private.”

Cardno agreed to changes in the Board composition and then the Board changed the shareholder recommendation which it had originally rejected.
“One of things that arose through the implementation agreement that was entered into was that the Board changed its recommendation from a reject recommendation, to a recommendation that differentiated between shareholders,” said Gordon.

“The Board [recommended that] if you have a short term investment horizon, you might consider selling into the offer and if you have a long term investment horizon, you might consider continuing to hold your shares.  It’s really rare to see a Board put up a split recommendation.

Gordon said Australia is likely to see further activity in the infrastructure sector over the coming months.

“Particularly with the companies that have exposure to the resources sector or the oil and gas sector, there have been a lot of change and a lot of difficulty,” he said.

“But also other engineering services that have exposure to government or civil infrastructure at the moment are looking at quite a bit of activity.

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