As expected, Starwood have confirmed that their bid for AOF will not succeed and have effectively dropped the proposal.
Starwood issued a Bidders Statement last week to AOF based for a cash offer of A$2.98 per AOF Unit. The Offer was subject to a 90% minimum acceptance condition, a material adverse effect condition and a range of other pre-conditions which included no new financing.
On Thursday this week, AOF confirmed that it had brought forward a refinancing $70m of their debt plus a further $30m of capacity with an extension of an existing tranche of its debt facility for five years that was due to expire in June 2021. The refinance effectively became a trigger for failure of the preconditions to the offer.
It was always going to be a battle for Starwood who were fighting against Hume Partners and its associates, who hold 14.61% of AOF units and had not supported the offer.
Clearly the market crash has also made the task of completing the deal more difficult with the unit price dropping to $1.95, down 35% on the offer price.
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