Xref Agrees to Seek’s $0.218 per Share Offer: What It Means for Shareholders

Big news from the ASX! Xref Limited (ASX: XF1) has entered into a binding agreement with Seek Limited (ASX: SEK) for a proposed acquisition. Let’s unpack the key details.

The Deal at a Glance

  • Offer Price: $0.218 per Xref share, payable in cash.
  • Structure: The acquisition will proceed via a Scheme of Arrangement, pending approvals.
  • Best and Final Offer: Seek has declared this as its best and final price unless a competing proposal emerges.

Key Conditions for the Scheme

For the deal to proceed, these conditions need to be met:

  1. Shareholder Approval: Xref shareholders must vote in favor of the Scheme at a dedicated meeting.
  2. Court Approval: The court must sanction the arrangement.
  3. Independent Expert’s Report: An expert must conclude the deal is in the best interests of shareholders.
  4. No Material Adverse Events: Nothing significant must occur to disrupt Xref’s business before the Scheme is implemented.

The agreement also includes typical exclusivity clauses like:

  • No Shop, No Talk: Xref can’t solicit or discuss alternative proposals, unless legally required.
  • Matching Rights: Seek gets a chance to match any superior proposal.
  • Break Fees: If the deal collapses under specific circumstances, either party may be liable for a 1% break fee.

What Do the Directors Say?

Xref’s board is fully behind the deal:

  • The directors unanimously recommend voting in favor of the Scheme.
  • They’ll also vote their own shares in support, subject to no superior proposal emerging and the independent expert endorsing the deal.

What’s Next?

The timeline is aiming for completion in Q1 2025. Here’s what to expect:

  1. A Scheme Booklet will be sent to shareholders, explaining the deal in detail and including the independent expert’s opinion.
  2. A Scheme Meeting will be held for shareholders to vote on the proposal.
  3. If approved, the Scheme will proceed to court for final approval.

What This Means for Xref Shareholders

  • Immediate Value: The cash offer of $0.218 per share provides certainty in a volatile market.
  • Unanimous Support: The board’s recommendation and fiduciary safeguards add confidence in the proposal.
  • Next Steps: Shareholders should review the Scheme Booklet carefully once it’s released.