BINGO Enters Into Scheme Implementation Deed with MIRA
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ASX Release 27 April 2021 BINGO enters into Scheme Implementation Deed with Macquarie Infrastructure and Real Assets (“MIRA”) • BINGO has entered into a Scheme Implementation Deed with Macquarie Infrastructure and Real Assets and its managed funds (together, “MIRA”) to acquire 100% of the share capital of BINGO by way of Scheme of Arrangement • Under the terms of the Scheme, BINGO shareholders will have the option to receive either $3.45 cash per BINGO share, or a mixed cash and unlisted scrip alternative • BINGO’s Board intends to declare a fully franked Special Dividend of up to $0.117 per BINGO share prior to implementation of the Scheme, which would enable shareholders to receive additional benefits from franking credits of up to $0.05 per BINGO share1 • BINGO’s Independent Board Committee and other BINGO Recommending Directors unanimously recommend the Scheme, subject to conditions outlined below • The cash consideration represents a 33% premium to the BINGO one-month volume weighted average price up to and including 18 January 2021 and an acquisition multiple of 19.5x LTM Dec 20 EBITDA2 • The Scheme is subject to certain conditions which must be satisfied or waived before the Scheme can be implemented • BINGO shareholders do not need to take any action at the present time BINGO Industries Limited (“BINGO” or “the Company”) (ASX:BIN) today announced that it has entered into a Scheme Implementation Deed (“SID”) with Recycle and Resource Operations Pty Limited, an entity owned by Macquarie Infrastructure and Real Assets and its managed funds (together, “MIRA”) for the acquisition of all of the issued shares in BINGO pursuant to a scheme of arrangement (“Scheme” or “Scheme of Arrangement”). If the Scheme is implemented, BINGO shareholders will receive total cash consideration of $3.45 per share (“Cash Consideration”), less any special dividend declared and paid to BINGO shareholders on or before the date of implementation of the Scheme (“Special Dividend”). Any Special Dividend is expected to be in the order of $0.117 per BINGO share and fully franked, resulting in franking credits of approximately $0.05 per BINGO share1. A mixed cash and unlisted scrip alternative to the Cash Consideration (“Mixed Cash and Unlisted Scrip Alternative”) of $3.30 per BINGO share, comprised of $1.32 in cash and the remainder in 1 It remains at the discretion of the BINGO Board whether the Special Dividend is ultimately declared and paid. Whether shareholders will be able to realise the full benefit of the franking credits will depend on individual tax circumstances. 2 Based on post-AASB 16 LTM Dec 20 EBITDA of $135m. ASX:BIN | ACN 617 748 231 | www.bingoindustries.com.au • 1300 424 646 • 305 Parramatta Rd Auburn NSW 2144 ASX Release 27 April 2021 unlisted scrip3 in Recycle and Resource Holdings Limited (an unlisted newly incorporated entity which will indirectly own 100% of the issued capital in BINGO (“RollCo”)) is available to BINGO shareholders4. Additionally, BINGO shareholders electing the Mixed Cash and Unlisted Scrip Alternative will be eligible for the Earn-out Dividend (defined below) of up to $0.80 per share. The Cash Consideration implies an equity value (on a 100% fully diluted basis) of approximately $2.3 billion and an enterprise value of approximately $2.6 billion5, and represents: • a 26% premium to the last undisturbed closing price of BINGO shares on 18 January 20216 of $2.74; • a 33% premium to the undisturbed one-month Volume Weighted Average Price (“VWAP”) 7 of $2.59; • a 32% premium to the undisturbed three-month VWAP of $2.62; • a 44% premium to the undisturbed six-month VWAP of $2.39; • an implied acquisition EV/EBITDA multiple of approximately 19.5x BINGO's LTM Dec 20 EBITDA8; and • an implied forward acquisition EV/EBITDA multiple of approximately 15.1x BINGO’s FY22F Consensus EBITDA9. BINGO Independent Board Committee and other BINGO Recommending Directors unanimously recommend the Scheme As announced on 19 January 2021, BINGO formed an Independent Board Committee (“IBC”) to consider the indicative proposal, comprised of Elizabeth Crouch AM, Maria Atkinson AM and Barry Buffier AM, each a BINGO Independent Non-Executive Director. The IBC and Daniel Tartak, BINGO Managing Director and Chief Executive Officer, Ian Malouf, BINGO Non-Executive Director, and Daniel Girgis, BINGO Non-Executive Director (together the “BINGO Recommending Directors”) unanimously recommend that shareholders vote in favour of the Scheme, in the absence of a Superior Proposal and subject to an Independent Expert concluding (and continuing to conclude) that the Scheme is fair and reasonable and in the best interests of 3 BINGO shareholders electing the Mixed Cash and Unlisted Scrip Alternative will receive 1 class B share, 1 preference share and 1 class C share with an aggregate issue price of $1.98 for each BINGO share elected. Further information on this alternative will be contained in the Scheme Booklet to be provided to BINGO shareholders. 4 Excludes certain ineligible foreign shareholders and is subject to a minimum election condition and scale back arrangements described below. 5 Implied equity value of $2.3 billion based on the cash proposal of $3.45 per share multiplied by 659,888,117 diluted shares on issue comprising 654,961,392 ordinary shares outstanding, 4,926,725 performance rights (based on Appendix 2A dated 16 February 2021). Enterprise value calculated as equity value plus net debt of $360 million comprising net bank debt of $317m and lease liabilities of $43m as at 31 December 2020. 6 Undisturbed closing price calculated as at the close of trading on 18 January 2021 being the last date of trading for BINGO prior to the announcement of the non- binding indicative proposal from CPE Capital and MIRA. 7 VWAP calculated to close of trading as at 18 January 2021 being the last day of trading for BINGO prior to the announcement of the non-binding indicative proposal from CPE Capital and MIRA. 8 Based on post-AASB 16 LTM Dec 20 EBITDA of $135m. 9 Based on post-AASB 16 broker consensus (average) FY2022F EBITDA of $175 million as at 26 April 2021. Nine broker earnings forecasts have been used to determine consensus average. The date range of the broker earnings forecasts used in determining the average was 22 February 2021 to 26 April 2021. These brokers were selected on the basis of all broker research reports that were updated post BINGO's 1H FY21 results and publicly available to BINGO. ASX:BIN | ACN 617 748 231 | www.bingoindustries.com.au • 1300 424 646 • 305 Parramatta Rd Auburn NSW 2144 ASX Release 27 April 2021 BINGO shareholders. Subject to those qualifications, the BINGO Recommending Directors, who hold or control 31.57% of BINGO shares on issue in aggregate, each intend to vote all the BINGO shares held or controlled by them in favour of the Scheme10. BINGO Independent Chairman and Non-Executive Director Michael Coleman has recused himself from discussions on the issue and abstains from giving a recommendation in respect of how BINGO shareholders should vote on the Scheme due to his position as a Non-Executive Director at Macquarie Group Limited (MIRA’s parent company). BINGO IBC Chairperson Elizabeth Crouch said: “The IBC is pleased to have reached unanimous agreement with MIRA on this proposal. The IBC has concluded that the Scheme is in the best interests of BINGO’s shareholders. “The IBC has explored a number of alternatives, including standalone value creation opportunities and alternative bidder interest. After considering future opportunities for the business, along with economic, regulatory and execution risks, the IBC has unanimously concluded that the Scheme is a compelling option which realises attractive value for our shareholders,” Ms Crouch said. Frank Kwok, Head of MIRA Asia-Pacific, said: “We believe the proposal we have developed in collaboration with BINGO will deliver real value for BINGO’s shareholders. The proposal recognises BINGO’s achievements and position in the marketplace, with a strong asset base and highly capable management team. “With MIRA’s significant experience investing in and operating recycling and waste management businesses around the world, we look forward to bringing our expertise to support the team in delivering BINGO’s next phase of growth,” Mr Kwok said. Mixed Cash and Unlisted Scrip Alternative Under the Scheme, a $3.30 per BINGO share Mixed Cash and Unlisted Scrip Alternative is proposed which would enable BINGO shareholders to retain an interest in the BINGO business. Subject to certain conditions, BINGO shareholders who elect to receive the Mixed Cash and Unlisted Scrip Alternative will receive, in exchange for each BINGO share: • $1.32 in cash (reduced to the extent of any Special Dividend); and • the remainder in unlisted scrip11 in RollCo. 10 Elizabeth Crouch 19,315 BINGO shares (0.003%), Maria Atkinson 85,000 BINGO shares (0.013%), Barry Buffier 130,000 BINGO shares (0.020%), Daniel Tartak 129,804,220 BINGO shares (19.819%), Ian Malouf 76,695,880 BINGO shares (11.710%) and Daniel Girgis 55,555 BINGO shares (0.008%). 11 BINGO shareholders electing the Mixed Cash and Unlisted Scrip Alternative will receive 1 class B share, 1 preference share and 1 class C share with an aggregate issue price of $1.98 for each BINGO share elected. Further information on this alternative will be contained in the Scheme Booklet to be provided to BINGO shareholders. ASX:BIN | ACN 617 748 231 | www.bingoindustries.com.au • 1300 424 646 • 305 Parramatta Rd Auburn NSW 2144 ASX Release 27 April 2021 Each class C share will entitle the holder to receive an earn-out dividend of up to $0.80, subject to certain conditions (summarised below) (“Earn-Out Dividend”).