destra Confirms Funding for Magna Pacific Acquisition
- Destra has confirmed that all necessary funding commitments to acquire Magna Pacific have been secured
- Destra and Magna Pacific have now signed a binding Scheme Implementation Agreement
Destra Corporation Limited (ASX:DES) (destra), Australia’s leading independent digital media company, today announced that it had obtained the necessary funding commitments, through a combination of bank debt and the investment by Prime Television (as announced earlier today), for the acquisition of Magna Pacific Holdings (ASX:MPH) (Magna), the leading independent film and DVD distributor in Australia and New Zealand.
Destra and Magna have now also signed a binding Scheme Implementation Agreement which sets out the definitive terms for implementation of the scheme (see Appendix for a summary of key terms). The previous conditions relating to due diligence and finance have now been satisfied. It is anticipated that a scheme booklet, including an explanatory statement and the Scheme Implementation Agreement, will be sent to Magna shareholders within four weeks.
Under the Scheme, destra will acquire all of the issued ordinary shares in Magna for a consideration per share of:
a) $0.38 cash (Cash Consideration); or
b) 1 fully paid destra ordinary share and $0.15 cash (equivalent to $0.43 based on destra’s last closing price) (Part Scrip Consideration), at the election of each Magna shareholder.
Destra believe that their proposal is far superior to the Lionsgate offer of 32 cents given that it:
- represents a premium to the Lionsgate offer of:
o 18.8% based on the Cash Consideration
o 34.4% based on the current value of the Part Scrip Consideration
- provides Magna shareholders the option to participate in ongoing value created by the merger including the realisation of anticipated synergies
In addition, the Directors of Magna unanimously recommend that shareholders vote in favour of the Scheme, in the absence of a superior proposal and subject to the Independent Expert concluding that the proposal is in the best interests of Magna shareholders. Subject to those same qualifications, all Magna’s Directors intend to vote all of their shares in favour of the Scheme. Magna’s Managing Director, Allan Radley has also indicated that he intends to accept the Part Scrip Consideration to retain exposure to the future upside of the merged entity.
The Magna Board also reiterate that it has recommended that Magna shareholders reject the current offer by Lionsgate Australia and IGNORE ALL DOCUMENTS AND COMMUNICATIONS FROM LIONSGATE given that their offer represents a substantial discount to the destra proposal and Magna’s current share price, and is neither Fair nor Reasonable as assessed by an independent expert, PKF.
Advisers Gresham Advisory Partners is acting as financial adviser and Allens Arthur Robinson is acting as legal counsel to destra.
Minter Ellison is acting as legal counsel to Magna.