Participations in silk logistics (ASX:SLH) has entered into a Scheme Implementation Deed with DP World Australia Limited to acquire 100% of its issued share capital through a Scheme of Arrangement. The proposed transaction values Silk’s equity at approximately $174.5 million, with shareholders receiving cash consideration of $2.14 per share, net of any dividends declared prior to completion of the plan.
Silk is an Australian logistics and supply chain solutions provider known for its integrated port-to-door logistics services. It offers transportation, warehousing and distribution solutions across Australia. The acquisition by DP World Australia, Oceania’s leading terminal operator and logistics company, is in line with its strategy to strengthen its capabilities in end-to-end supply chain services. The scheme represents a 45.6% premium to Silk’s last closing share price of $1.47 on November 8, 2024, and a 60.6% premium to the volume-weighted average price of a month (VWAP) of $1.33.
Silk’s board unanimously recommended that shareholders support the plan, provided there is no superior proposal and the independent expert concludes that the plan is in the best interests of shareholders. Major shareholders representing about 46% of Silk’s shares, including Tor Asia Credit Master Fund LP and entities linked to Silk CEO John Sood and Brendan Boyd, have already pledged to vote in favor.
Silk president Terry Sinclair noted: “The Board has carefully considered DP World Australia’s proposal and believes it represents compelling value.” CEO John Sood added: “Today is an important and exciting day in Silk’s history. The proposed transaction recognizes the significant investment made by Silk… We see a strong strategic and cultural alignment between Silk and DP World Australia.”
DP World Australia, whose parent company DP World operates one of the world’s largest marine terminal networks, noted that the acquisition would enhance its ability to offer comprehensive logistics solutions across the region. Glen Hilton, CEO and managing director of DP World Asia Pacific, commented: “Combining DP World Australia’s terminal operations with Silk’s value-added services enhances our ability to deliver advanced customer solutions and create sustainable value for all interested parties”.
Completion of the program is subject to approvals from the Foreign Investment Review Board (FIRB), ASIC, ASX and the Court, together with a shareholder vote, expected in the third quarter of fiscal 2025.
On the back of the news, Silk shares rose 40.82% to $2.07.