Shares in Silver Chef rallied before it announced $39m takeover offer

Shares in Brisbane-based firm Silver Chef rallied 16 per cent on Thursday before the equipment financing firm revealed it had received a $39 million takeover bid.

Silver Chef has received a conditional takeover offer from Next Capital.

SHARES in Brisbane-based Silver Chef rallied 16 per cent on Thursday ahead of the company’s announcement that it had received a takeover offer of more than $39 million.

The hospitality industry equipment rental and financing firm revealed after the market closed that Next Capital had made a confidential, non-binding, indicative and conditional offer to acquire all of the shares in Silver Chef for $1.00 a share, valuing the company at $39.3 million.

Next, a private equity firm, will also pay shareholders 50 per cent of any capital, that exceeds $10 million, released from the run-off of its GoGetta division.

Silver Chef shares rose 16.4 per cent or 14¢ to 99.5¢ on Thursday. The stock spiked from 90¢ to 99¢ in just over an hour from 11am. The stock traded as high as $4.68 in May last year.

The company told shareholders the Next proposal was conditional on the completion of due diligence and Silver Chef’s financiers providing necessary approvals. Silver Chef has entered into an exclusivity agreement with Next until April 30 and provided it with access to its financiers.

“At this stage there is no offer from Next that is capable of acceptance by ... shareholders and there is no certainty that the (offer) will proceed,” Silver Chef said.

Last month Silver Chef announced that it was trying to negotiate $45 million in mezzanine debt that was conditional on the company undertaking a $20 million equity raising.

It noted on Thursday that since the release of its half year results on March 1, its share price had slumped from $1.55 to 85.5 cents on Wednesday.

“The combined effect of the reduced near-term financial outlook and the share price fall has been the dual impact of significantly increasing the difficulty of raising the $20 million of prerequisite equity and at the same time reducing the ability to source $45 million of mezzanine debt,” the company said.