- Waste management and recycling giant Bingo Industries (BIN) has officially been offered a $2.6 billion takeover bid by Macquarie Infrastructure and Real Assets (MIRA)
- Bingo today signed a program implementation deed with MIRA’s subsidiary, Recycle and Resource Operations, for the potential takeover deal
- BIN shareholders have two payment options: either receive $3.45 per share in cash, or accept a lower payment but retain an indirect interest in Bingo
- The cash payout of $3.45 per share represents a 33% premium to Bingo’s one-month volume-weighted average price and values the company at $2.6 billion.
- The alternative option is to receive $1.32 per share in cash and the rest of the payment in unlisted certificates in a newly formed entity called RollCo, which will own 100% of Bingo’s capital.
- This second option gives shareholders the option to receive a potential top-up dividend of 80 cents based on Bingo’s financial performance by FY24.
- Bingo directors unanimously recommended voting in favor of takeover
- Bingo shares soared near the bid price this morning, up nearly 7% to $3.42 apiece
Waste management and recycling giant Bingo Industries (BIN) has officially been offered a $2.6 billion takeover bid by Macquarie Infrastructure and Real Assets (MIRA).
Bingo today entered into a program implementation deed with MIRA’s subsidiary, Recycle and Resource Operations, for the potential buyout deal.
Under the deal, BIN shareholders have two options: either accept a payment of $3.45 per share from the buyers, or accept a smaller cash payment but retain a stake in a new entity to be created. in connection with the takeover of Bingo/MIRA.
The all-cash option
The all-cash payment would see shareholders receive $3.45 per Bingo share held, less any dividends paid by Bingo before the takeover was completed. Although Bingo has yet to officially declare a dividend, the company said it plans to declare a fully franked payment of 11.7 cents per share as a special dividend.
Although this is deducted from the purchase price, it still gives shareholders approximately five cents of franking credits per share in the redemption.
The price of $3.45 represents a 33% premium to Bingo’s one-month volume-weighted average price (VWAP) of $2.59 and a 44% premium to its six-month VWAP .
The offer gives Bingo a net worth of approximately $2.3 billion and an enterprise value of $2.6 billion.
The alternative to cash vouchers
For investors who wish to remain on Bingo’s share register, they can choose to receive a cash and certificate alternative which would allow them to pocket $1.32 per share in cash and the remainder of the payment in unlisted certificates in a new entity to be formed called RollCo, which will hold 100% of Bingo’s capital.
This second option gives shareholders the option of receiving an additional dividend of up to 80 cents per share.
This additional dividend will be subject to Bingo’s future performance and as such carries some risk.
The full payment of 80 cents per share will only be made if Bingo reaches $240 million in underlying earnings before interest, taxes, depreciation and amortization (EBITDA) in fiscal year 2024.
If the company’s EBITDA range during this period is between $220 million and $240 million, the dividend will be paid pro rata, i.e. proportional to how close Bingo is to the target of $240 million. millions of dollars.
If FY2024 EBITDA is less than $220 million, no dividend will be paid.
However, the dividend can be paid early if Bingo’s EBITDA reaches $240 million in fiscal years 2022 or 2023.
Bingo said its directors, who own 31.57% of the company’s proposed shares, unanimously recommend the offer to shareholders and plan to use their voting rights to vote in favor of the MIRA program.
Bingo IBC President Elizabeth Crouch said the program was in the best interests of shareholders.
“IBC explored a number of alternatives, including stand-alone value creation opportunities and interest from alternative bidders,” Elizabeth said.
“After considering future opportunities for the business, as well as economic, regulatory and enforcement risks, the IBC unanimously concluded that the program is a compelling option and realizes attractive value for our shareholders,” she said.
Bingo shares soared near the bid price this morning, up 6.72% to $3.42 each as of 11:03 a.m. AEST.