Tenon Confirms Intention to Make Capital Return to its Shareholders
Released 14 October 2016
Tenon announced today that it had applied to the High Court for initial
orders directing it to seek shareholder approval for a return of capital, as
had been previously discussed in Tenon''s FY''16 Annual Report distributed to
shareholders in September.
Tenon''s Chairman, Luke Moriarty, said that "The capital return is a
consequence of the sale of the Company''s North American business (which is
pending Tenon shareholder approval) to Blue Wolf Capital. Given the change in
the scale of Tenon''s ongoing business and our lesser ongoing capital
requirements post the sale, the net sale proceeds (after repayment of all
Tenon debt) is surplus capital, and the Board is seeking to return that to
Tenon shareholders.
Accordingly, the Company proposes to undertake a pro rata return of capital
to Tenon shareholders equating to US$1.10 per existing Tenon share (approx.
NZ$1.55 per share at a 71 cent FX rate), which amounts to US$71.3 million
(approx. NZ$100 million). This return of capital will be undertaken by way
of a cancellation of Tenon shares under a High Court approved scheme of
arrangement under the Companies Act 1993, by which Tenon will cancel one out
of every two ordinary shares held by each shareholder and pay the NZ$
equivalent of US$2.20 for every ordinary share cancelled, which is equivalent
to US$1.10 for every share held prior to cancellation. The capital return is
expected to be made in one payment in late December 2016, following receipt
of final orders from the High Court."
The capital return and the sale to Blue Wolf Capital are each subject to
approval by shareholders at Tenon''s Annual Shareholders'' Meeting to be held
on 18 November 2016, and the capital return is also subject to completion of
the sale to Blue Wolf Capital, expected to be on 30 November (New York time).
Tenon will apply to the High Court for final orders sanctioning the capital
return if, at the Company''s Annual Shareholders'' Meeting, shareholders
approve the Blue Wolf sale and the capital return.
Full details of the proposed sale to Blue Wolf (including an independent
report from Grant Samuel) and capital return will be provided in the
documentation for the Annual Shareholders'' Meeting which will be distributed
to shareholders in early November.
ENDS
End CA:00290870 For:TEN Type:GENERAL Time:2016-10-14 09:42:43