The HUB24 Ltd (ASX: HUB) share price was again on the move today following an update on the terms for its planned takeover of Class Ltd (ASX: CL1).
At market close, the HUB24 share price finished at $27.12, 7.25% lower than its previous close.
Let’s take a look at the new changes made to the part cash, part scrip takeover offer.
HUB24 share price slips on takeover correction
Another change has been made to HUB’s recently updated takeover offer posed to Class.
It follows on from Tuesday’s news which saw the HUB24 share price tumble before correcting itself to gain 1.7%.
While the potential acquirer only recorded a slight gain, the Class share price surged 5.36%.
Yesterday, the companies announced HUB24 had upped the cash portion of its offer to 12.5 cents for each Class share. Originally, it proposed to pay just 10 cents per share.
Additionally, the scrip portion of the offer – which would see Class shareholders receiving 1 HUB24 share for every 11 Class shares they own – was amended to allow Class shareholders access to any dividends and franking credits paid by HUB24 for the first half of financial year 2022.
That is, if the scheme is implemented before HUB24’s ex-dividend date.
Today, Class has corrected a mistake it made on yesterday’s release to the market. Here’s what the company said:
[Yesterday’s] announcement stated that HUB24 shares issued as scrip consideration would now include the ‘right’ or ‘entitlement’ to the interim dividend paid by HUB24 in respect of [the first half of financial year 2022] …
It should instead state the HUB24 shares issued as scrip consideration include an ‘unconditional right’ or ‘unconditional entitlement’ to the interim dividend paid by HUB24.
The inclusion of the word “unconditional” seems to have spooked the market on Wednesday.
Interestingly, the Class share price suffered just as much as HUB24’s.
It closed the day 5.09% down at $2.61.
The post Here’s why the HUB24 (ASX:HUB) share price slid 7% today appeared first on The Motley Fool Australia.
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More reading
- HUB24 (ASX:HUB) share price slumps on upped takeover terms
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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Hub24 Ltd. The Motley Fool Australia owns and has recommended Class Limited. The Motley Fool Australia has recommended Hub24 Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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