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Alesco and Dulux reach takeover
Alesco and Dulux reach takeover

DuluxGroup has finally won over garage door maker Alesco Corporation in its long-running $210 million takeover battle.

The pair today said they had struck a deal which will see the reluctant takeover target Alesco recommend its shareholders accept Dulux’s $2.05-a-share offer.

Under the deal, the pair have agreed that Alesco may pay its shareholders a special dividend of up to 27 cents per share as part of the Dulux offer.

The payment is dependent on Dulux’s holding in Alesco reaching 90 per cent and the takeover target receiving a favourable tax ruling.

Dulux currently holds a 55.7 per cent stake in Alesco.

While Alesco said it had accepted the offer and would recommend it to shareholders, it still appeared to have some misgivings.

"Your board’s view is that the decision as to whether or not to recommend DuluxGroup’s offer is finely balanced,” Alesco chairman Mark Luby said today.

"We have consistently said that the offer undervalues Alesco.

"However, the Alesco directors believe, on balance, given the circumstances shareholders would be better served by the board facilitating the possibility of an additional dividend, subject to DuluxGroup achieving a 90 per cent interest in Alesco."

Dulux chairman Peter Kirby welcomed Alesco’s decision.

"As a result, Alesco may distribute to its shareholders up to 27 cents per share of fully franked dividends,” he said.
"It’s a win for Alesco’s shareholders and DuluxGroup shareholders."

The paintmaker’s takeover offer has been quagmired in disagreement over dividend payments and franking credits since its launch in May.

Its offer includes up to 42 cents a share of fully franked dividends.

But Alesco had said it would only support an offer that incorporated the ability to pay fully franked dividends of up to 75 cents a share.

Under the newly agreed terms, the takeover offer would include $1.63 in cash paid by Dulux and dividends of 42 cents per share paid by Alesco.

The 42 cent dividend payment would be made up of a five cent fully franked dividend and a 10 cent fully franked special dividend - both already paid by Alesco on September 7 - and the extra 27 cent a share fully franked dividend.

Dulux has agreed to hold off declaring its offer unconditional while there is a chance that an additional 27 cents dividend can be paid by Alesco.

It had previously said it would declare its takeover offer unconditional on or after October 1, once its holding reached 50.1 per cent.