Alesco and DuluxGroup have held talks in a bid to find a resolution to their messy five-month takeover battle.
DuluxGroup’s $210 million bid to buy building products maker Alesco has been quagmired in disagreement over dividend payments and franking credits since its launch in May.
However, with an October 1 deadline looming before DuluxGroup potentially declares its offer unconditional, Alesco came up with a possible ice breaker.
As the chairman of both companies prepared to meet in Sydney on Wednesday, Alesco placed its shares in a trading halt.
In a statement to the Australian Securities Exchange, Alesco company secretary Luci Rafferty said the proposal would include the possibility of an additional 27 cents per share fully franked dividend for all shareholders as part of the offer.
Ms Rafferty cautioned however that there was “no certainty that any agreement can be reached in relation to the proposal”.
Dulux’s offer of $2.05 per share included a fully franked dividend of 15 cents and six cents in franking credits.
It was understood the two parties met in Sydney, where Alesco presented a proposal to allow the company to pay shareholders the extra dividend and franking credits.
Alesco would need the financial backing of DuluxGroup to pay the extra dividend, with The Australian website reporting Alesco was seeking $30 million in financing.
It is understood that the talks between Alesco chairman Mark Luby and his Dulux counterpart Peter Kirby failed to make much progress.
However more talks are planned for coming days.
Should the parties come to an agreement, the Dulux offer would include a higher fully franked dividend of 42 cents and 18 cents of franking credits.
Alesco declared a fully franked 15 cents a share dividend at its full year results in August, and the company was not in a position to pay any additional dividends due to its existing banking facilities.
In an update on its takeover offer, Dulux said on Wednesday its holding of Alesco had risen to 54.07 per cent.
Alesco’s franking credits would not be able to be used should Dulux declare its offer unconditional on or after October 1.
At Alesco’s annual general meeting on September 18, chairman Mark Luby told shareholders the board would consider its options once Dulux reached above the 50.1 per cent needed to declare its offer unconditional.
“Fortunately we’ve kept our options open all the way through and we’d be still prepared to sit down and talk,” Mr Luby said at the time.
Mr Luby described the bid as hostile, unsolicited and opportunistic.
Alesco, which last traded at $2.00 said the trading halt would remain until Friday.
Meanwhile, DuluxGroup closed Wednesday’s local session down four cents at $3.23.