Rebel Sport Limited entered into an agreement with a wholly owned subsidiary of Archer Capital Pty Ltd for the negotiation of a scheme implementation agreement pursuant to which an entity nominated by Archer will acquire the shares of Rebel Sport for a price of $4.60 per share. The agreement is subject to certain closing conditions including the completion of due diligence investigations.
On September 1, 2006, shortly after the company released its 2006 financial results, Rebel sahres traded at $3.34. The price offered by Archer represents a premioum of 28% over that value and a multiple of 16.8x 2006 net profit after tax.
“We believe it will be an attractive offer for shareholders,” said Managing Director of Rebel Stephen Heath. “If the transaction occurs it will be an exciting development for the company, staff and our business partners.”
Peter Gold, a partner of Archer Capital who is also a director of Amart All Sports that is majority owned by Archer managed funds, added “we have not had an opportunity to map out the future of the companies as a merged entity, but we are certain that the businesses will continue to operate as two separate brands and will retain the unique cultures that have been built within.”
The agreement that has been signed contains provisions for break fees to be payable by Archer or Rebel under certain conditions. Rebel has granted a period of exclusivity to Archer to complete due diligence investigations and put a binding offer to shareholders.
According to Rebel, the other conditions of the agreement remain confidential, conditional, and non-binding, and are not yet in a form capable of being put to shareholders.
