Company news: Pacific Brands
Pacific Brands (PBG.ASX) announced that it has entered into a Scheme Implementation Deed with HanesBrands to acquire 100% of Pacific Brands shares for A$1.15 per share in cash, which represents a 30% premium to the 5-day VWAP and a 12x F16 EV/EBITDA multiple based on consensus.
Pacific Brands proposes to pay a fully franked special dividend of 9.4 cents per share if the transaction proceeds, potentially providing an additional benefit of up to 4.0 cents per share for shareholders who can capture the full benefit of the franking credits.
Prior to this announcement PBG represented a significant holding in clients' equity portfolios. As a result this transaction will have a material impact on the portfolio, its returns and future positioning.
Absent a better deal eventuating, we are likely to vote in favour of this transaction for our clients.
After a rocky and slow couple of (turnaround) years, Pacific Brands has turned into a great investment for our clients, as we expect to be the case for a number of our other investments.