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Post Market Wrap | CIMIC recommends acceptance of $22 cash offer by HOCHTIEF

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This Post Market Wrap is presented by KOSEC – Kodari Securities

  • Independent Expert’s mid-point valuation $22.15 a share
  • HOCHTIEF entitled to 85 percent of CIMIC; competing bid highly unlikely
  • CIMIC shareholders not entitled to 36 cents Unfranked Final dividend
  • Offer is final and closes 11 April 
  • Cash settlement to occur within five days of lodgement of Acceptance Form 

CIMIC Group Limited (‘CIMIC’ or the ‘Group‘), an ASX200 company, formerly Leighton Holdings, provides construction, mining, engineering and maintenance services to the infrastructure, resources and property sectors. More recently, the Group has established itself as the market leader in Australian renewables projects. Today, CIMIC employs 31,000 people and operates in more than 20 countries. CIMIC Group comprises well established businesses and brand names including CPB Contractors, Leighton, Theiss and UGL. Pacific Partnerships established by CIMIC in 1994 invests in, develops and manages infrastructure assets under Public Private Partnership (‘PPP‘) structures. Pacific Partnerships has delivered more than 30 PPPs for a value of close to $60 billion since the late 1990s. 

CIMIC Directors recommend HOCHTIEF Offer 

The Independent Directors of CIMIC have today unanimously recommended that shareholders accept HOCHTIEF’s final unconditional Offer price of $22 cash per CIMIC share. The Independent Directors intend to accept the offer for the shares they control. The recommendation follows HOCHTIEF’S unsolicited takeover offer launched on 23 February 2022. At the time of the Offer, HOCHTIEF owned 85 percent of CIMIC shares and the Offer price represented a 33 percent premium to the previous closing trading price of CIMIC shares. 

This final Offer price follows the receipt of the Independent Expert’s conclusion that the Offer is fair and reasonable for CIMIC shareholders. The Independent Expert assessed the estimated market value of CIMIC shares to be in the range of $19.26 to $25.05. This is a mid-point valuation of $22.15.

The Offer price has been declared unconditional and final by HOCHTIEF, which means it cannot be increased, unless a competing proposal is made by another company. This is highly unlikely because HOCHTIEF owns 85.1 percent of CIMIC, as of 22 March. The Offer closes on April 11, and cash settlement will occur within 5 days of the shareholder Acceptance Form being received by the CIMIC share registry.

On February 10, CIMIC declared an unfranked Final Dividend of 36 cents, payable on July 5. Shareholders accepting HOCHTIEF’S Final Offer price will not be entitled to receive this dividend. The Independent Expert took this matter into consideration before determining the assessed fair market value of CIMIC shares. 

Image: File

CIMIC shareholders who do not accept the Final Offer price will have their shares compulsorily acquired by HOCHTIEF after the Offer closes. In the unlikely event that HOCHTIEF is unable to compulsorily acquire CIMIC shares, HOCHTIEF intends to de-list CIMIC from the ASX. De-listing will make it extremely difficult for CIMIC shareholders to realise value for their shares.  Accepting the Offer now ensures that shareholders receive their cash entitlement earlier rather than several weeks after the Offer closing date of 11 April. 

This Post Market Wrap is presented by Kodari Securities, written by Michael Kodari, CEO at KOSEC.

Michael Kodari is one of the world's most consistent, top performing investor. A philanthropist and one of the prominent experts of the financial markets, he has been referred to as ‘the brightest 21st century entrepreneur in wealth management' by CNBC Asia and featured on Forbes. Featured on TV as the "Money Expert", on the weekly Sunday program "Elevator Pitch", he is recognised internationally by governments as he was the guest of honour for the event "Inside China's Future", chosen by the Chinese government from the funds management industry, attended by industry leaders, when they arrived in Sydney Australia, on April 2014. Michael and George Soros were the only two financiers in the world invited and chosen by the Chinese government to provide advice, and their expertise on Chinese government asset allocation offshore. With a strong background in funds management and stockbroking, Michael has worked with some of the most successful investors and consulted to leading financial institutions. He was the youngest person ever to appear on the expert panel for Fox, Sky News Business Channel at the age of 25 where he demonstrated his skillset across a 3 year period forming the most consistent track record and getting all his predictions right over that period. Michael writes for key financial publications, is regularly interviewed by various media and conducts conferences around the world.

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Elon Musk’s secretly welcomed twins last year

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Elon Musk secretly welcomed twins just weeks before his second child with Grimes was born last year

The world’s wealthiest man, Elon Musk is believe to have fathered 10 children after a top executive from one of his companies gave birth to twins last year.

The mother of the children is Shivon Zilis, a senior member of Musks’ artificial intelligence company, Neuralink.

Zilis is considered a rising star in the world of AI, after being listed on Forbes’ 30 Under 30 in 2015, and LinkedIn’s 35 under 35.

According to her LinkedIn, she is currently the Director of Operations and Special Projects at Musk’s neurotechnology firm, Neuralink.

Court documents show the pair filed a petition to change their twins’ last names to Musk, and contain their mothers last name as part of their middle name.

The petition was filed in Austin, Texas which is also the birthplace of Zilis and Musk’s children where they were reportedly born in November 2021.

The two children will add to the six children Musk has with ex-wife, Justine Musk, and two children with Canadian singer Grimes.

The twins will also join Justine and Musk’s 18-year-old daughter, Vivian Jenna Wilson who has recently strived to cut ties with her father.

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Britain’s watchdog investigating unfair conduct at Amazon

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Amazon is being placed under the spotlight in Britain, with the nation’s antitrust watchdog investigating whether the company has engaged in unfair conduct

Britain’s CMA is wanting to establish whether Amazon’s own sellers have an advantage in its marketplace over third parties.

The body is concerned the company’s practices are lessening competition and consumers are getting a worse deal as a result.

The CMA says it is looking into Amazon’s third-party data to see if it’s being used to boost its own retail business, and favour sellers who use the company’s logistics and delivery services.

The investigation follows a similar matter which is ongoing in Europe.

Amazon says it will continue to work closely with the CMA during the investigation.

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Taco Bell owners close to selling KFC in Russia

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KFC is known for finger lickin’ chicken, but the secret herbs and spices will soon be swept away from Russians

The company behind Russia’s KFC business is close to selling

This is all part of its plan to exit the country’s market.

Yum Brans plans to fully exit Russia once the KFC transaction is complete.

Since March, Yum has been redirecting any profits from its Russian operations to humanitarian efforts.

The restaurant company added it is stopping all investment, restaurant development and operations in the country.

It sold its Russian Pizza Hut franchises, which re-branded in may.

The Taco Bell owner is the latest Western restaurant operator to wind down its Russian operations, closing the doors of about one thousand KFC locations

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