Aegis Group Agrees to Pay About $325 Million for Mitchell Communications

Aegis Group Plc, the world’s largest independent buyer of advertising space, agreed to buy Mitchell Communications Group Ltd. for A$363 million ($325 million) to gain the top position in the Australian market.

The offer is worth A$1.20 per share with investors able to accept cash or Aegis stock, Melbourne-based Mitchell said in a statement today. The bid, which the Australian company’s board unanimously supports in the absence of a higher offer, is 15 percent more than Mitchell’s last traded share price on July 28.

Harold Mitchell, the Australian company’s chairman and biggest investor, will accept stock for his 30 percent stake. The deal comes about three months after London-based Aegis flagged plans to pursue acquisitions with the sale of 170 million pounds ($266 million) of convertible bonds.

Investors accepting stock, will receive 40 Aegis shares for every 67 Mitchell shares held. The agreement needs to be supported by a shareholder vote at a special meeting expected later this year as well. It must also gain court approval.

The bid is also subject to an independent review finding it’s in the best interests of Mitchell shareholders.

Aegis was advised by Greenhill and Co. while Australia & New Zealand Banking Group Ltd. advised Mitchell.

To contact the reporter on this story: Robert Fenner in Sydney rfenner@bloomberg.net

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