Promentum paves the way for private equity takeover

Shareholders overwhelmingly vote to take up the Gresham-backed GEON offer valuing the company at $127.3 million.

According to Promentum chairman, Ian Elliot, the GEON bid was the best offer on the table. The company had received other proposals and had at one stage last year had drawn up plans to go it alone.

But the size of the GEON offer, which values the company on a price to earnings ratio of 18.9 times 2006 earnings, was simply too rich to be knocked back, especially in light of actual price to earnings ratio of 10.6 up to December.

In an address to shareholders Elliot said, “The Promentum Board has been reviewing proposals from a number of parties interested in acquiring Promentum … on 12 January 2007, Promentum and GEON signed a Merger Implementation Agreement, setting out the basis on which GEON will acquire all of the shares of Promentum under a scheme of arrangement.”

Independent expert Lonergan Edwards was appointed to assess the merits of the takeover and concluded that it was in shareholders' best interests to accept.

The takeover needs to be submitted to the Federal Court for final approval. If approved notice will be sent to scheme participants on about 2 May 2007.

With the addition of Promentums' $170m turnover these developments take GEON one step closer to being one of the largest commercial sheetfed companies in the world.

Promentum executive chairman, Ian Elliott and managing director, Ian Parker, abstained from voting or making reccomendations to the shareholders' meeting, a sure sign they will be taken on as executives with GEON.



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