Blackmores share price rockets 22% on $1.9 billion takeover bid

A businessman leaps in the air outside a city building in the CBD.A businessman leaps in the air outside a city building in the CBD.

The Blackmores Ltd (ASX: BKL) share price just leapt 22.1%.

Shares in the S&P/ASX 200 Index (ASX: XJO) vitamin and health supplement manufacturer closed yesterday trading for $76.79. Shares are currently swapping hands for $93.80 apiece.

This comes amid news of a $1.9 billion takeover bid.

What’s all this about a takeover offer?

The Blackmores share price is heading for the sky after the company reported it has entered into a scheme implementation deed with Kirin Holdings Company.

The scheme would see Kirin acquire 100% of Blackmores’ issued share capital for $95 per share, less any special dividend declared prior to its implementation.

That’s 24% higher than the Blackmores share price closed at yesterday, giving you some idea why shares are leaping higher today.

With 19.45 million shares outstanding, the deal values Blackmores at $1.85 billion.

Should the takeover proceed, the Blackmores board said it will declare a fully franked special dividend of $3.34 per share, subject to availability of franking credits. Management expects shareholders will benefit from franking credits of $1.43 per share attached to that special dividend.

The Blackmores board also unanimously recommended the scheme, subject to certain standard conditions.

Marcus Blackmore is Blackmores’ largest shareholder, with some 18% of the company’s shares. He has agreed to vote in favour of the scheme unless otherwise directed by Kirin.

“The Kirin scheme represents an attractive, all-cash transaction,” Blackmores chair, Wendy Stops, said.

Stops added, “The Blackmores board believes the agreed scheme consideration represents appropriate long-term value for the company and an attractive outcome for Blackmores shareholders.”

Commenting on the takeover proposal sending the Blackmores share price soaring today, CEO Alastair Symington said:

Today is an important day in the history of Blackmores… Importantly it also confirms the significant opportunity that lies ahead for our employees and other key stakeholders of Blackmores as both companies come together to combine their focus on growing Kirin’s health science business across the world.

Symington added that the two companies will together have a larger platform “to further leverage the Blackmores brand, accelerate penetration into high growth Asian markets, and expand its presence into new geographies”.

Blackmores shareholders don’t need to take any action yet at this time.

Management expects a court-convened shareholder meeting to be held in July 2023.

Blackmores share price snapshot

As you can see in the chart below, the Blackmores share price was already a solid performer over the past year before today’s big boost.

With that intraday lift factored in, Blackmores shares are now up 33% over the past 12 months.

The post Blackmores share price rockets 22% on $1.9 billion takeover bid appeared first on The Motley Fool Australia.

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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Blackmores. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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