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Phaunos receives cash offer from Stafford Capital Partners

Phaunos receives cash offer from Stafford Capital Partners 1

Phaunos receives cash offer from Stafford Capital Partners – Further to the announcement by Stafford Capital Partners (click here to read more) on 5 June 2018 setting out the key financial terms of a possible offer for Phaunos Timber Fund Limited (PTF), Stafford has announced its proposed all-cash offer.

Phaunos receives cash offer from Stafford Capital Partners

The offer is made by Stafford Bidco, which is a company wholly-owned by Stafford International Timberland Fund VIII and ultimately controlled by Stafford:

  • under the terms of the cash offer, Phaunos shareholders will receive US$0.49 in cash for each Phaunos share.
  • the cash offer values Phaunos’s entire issued and to be issued share capital at approximately US$244.2 million (on a fully diluted basis).

The price of US$0.49 per Phaunos share represents a premium of approximately:

  • 11% to the closing price of US$0.44 per Phaunos share on 4 June 2018 (being the last business day prior to the commencement of the offer period); and
  • 1.2% to Phaunos’s net asset value per Phaunos share of US$0.51 as at 31 December 2017 (taking into account downward adjustments for currency fluctuations and the compulsory share redemption post 31 December 2017).

The cash offer has a number of benefits for Phaunos shareholders:

  • rather than get separate payments at regular intervals as can happen with a wing up (which could take up to 20 months), Stafford could make the money available in one payment at the end of the offer period
  • the knowledge that there is one sale, where Phaunos do not have to separately go through the process of finding buyers for each of its assets individually
  • certainty of the removal of the challenges associated with a relatively illiquid asset class and any unforeseeable issues that may arise in connection with the managed wind-down process

The offer period begins on 5th June 2018. it is expected that the offer document, containing the full terms and conditions of, and further information about, the cash offer, and the form of acceptance (for Phaunos shareholders that hold their Phaunos shares in certificated form only) shall be published within 28 days of the announcement made on 3rd July 2018  and not within the 14 days without the consent of the Phaunos Board.

Update – Phaunos response

The board of Phaunos reiterates its commitment to balance maximising the value from the company’s investments with making timely returns of capital to shareholders.  As previously announced and in line with the strategy set out to shareholders, the company has been focused on the realisation of its asset portfolio which was initiated in August 2017.

The company confirms that it has now received initial indications of interest from various parties for each of the assets included in the process, which it is currently assessing.  These indicative bids are “encouraging” and the board says it is very pleased with progress made to date.

Under the offer timetable, Stafford are expected to post their formal offer document between 18 July 2018 and 27 July 2018.  Following the posting of the offer document, Phaunos has up to 14 days to post a response document that will include an update on the asset realisation process as well as the board’s views on the value of Stafford’s offer.

Accordingly, the board urges shareholders to take no action at this time.

PTF : Phaunos receives cash offer from Stafford Capital Partners

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