Wridgways Australia Ltd. won an Australian court’s approval for its plan to sell the company to Santa Fe EAC Moving and Relocation Services for A$89.6 million ($88.6 million), to be voted on by shareholders Nov. 25.
Santa Fe’s offer of A$2.80 a share is 10 percent less than the high end of a range of A$2.60 to A$3.11 that accounting firm BDO Australia concluded Wridgways was worth, Federal Court Judge Peter Jacobson said at a hearing in Sydney today. The shares closed at A$2.78 on the Australian Securities Exchange yesterday and haven’t traded today.
“The court doesn’t usurp the judgment of the shareholders,” said Jacobson, who had to decide whether the plan was fair. It will be up to the shareholders to decide whether the A$2.80 offer is adequate, he said.
Closely held Santa Fe, based in Hong Kong, offered on Sept. 20 to buy Wridgways, a 117-year-old Australian moving company with 30 offices and 470 employees, under a so-called scheme of arrangement. Under the plan, Santa Fe must win support from 75 percent of Wridgways shareholders and the judge must approve it.
Jacobson raised concern that parts of the plan protecting Santa Fe’s bid, including its right to match any competing offer and a lack of a provision giving a potential rival bidder time to respond to a matching offer, might be anti-competitive.
“It’s a disincentive to a competing bidder,” he said.
Wridgways must inform the shareholders of any superior offer that’s made, and a rival bidder will have time to respond to Santa Fe’s match because of a delay before shareholders get a chance to vote, Malcolm Oakes, a lawyer for the company, told the judge.
The case is: Application by Wridgways Australia Ltd. NSD1227/2010. Federal Court of Australia (Sydney).