Oliver's a $25m snack option for EG Group
Service station health food outlet Oliver's has firmed as a $25 million snack option for EG Group as the restaurant chain enters advanced takeover discussions with the British firm.
Oliver's Real Food shares shot up more than 30 per cent to 8.5 cents after the company emerged from a trading halt on Wednesday in the wake of EG's non-binding, conditional, 10 cent per share takeover offer.
The offer is at a 54 per cent premium, or 3.5 cents higher than Oliver's closing share price of 6.5 cents on Tuesday. It values the company's 25-store network of health-conscious restaurants at $25 million.
EG's bid comes just three weeks after it made an unsuccessful $3.9 billion cash and shares offer for Caltex Australia.
EG Group, or Euro Garages, went head-to-head with Canadians Touche-Card earlier this month in making a play for Caltex's convenience store business and separate shares in a new, listed infrastructure and refinery company made up of Caltex's remaining assets.
The Caltex board took legal and financial advice, and considered feedback from shareholders, before rejecting the offer.
Oliver's on Wednesday advised its shareholders to sit tight but also flagged it would continue discussions with EG.
"After careful assessment, the board of Oliver's had determined that engaging further with EG Group is in the best interests of shareholders," Oliver's told the ASX in a release.
Last week Oliver's announced it had slashed its half-year loss by two thirds to $3.65 million even as revenue slipped by 1.7 per cent, or $316,000, on account of reduced highway traffic during the summer bushfire crisis.
Earnings after one off items came in at $44, an improvement of $10.3 million from the same period a year ago.
The company did however cop $300,000 in impairments and paid $916,951 in directors' options as it continues its rebuild after a rocky three years.
Oliver's chief executive Jason Gunn, who founded the company in 2005, was removed from the firm in May 2018 by the same directors he had put in place to support the $15 million capital raising and listing process in 2017.
He returned to lead Oliver's in March last year after it had stumbled through a series of disappointing results and profit downgrades, with many of its top brass jumping ship.
The company's share price began to show signs of recovery as it stemmed its earnings bleed and closed unprofitable stores but Mr Gunn was forced to loan the business some of his own money last July as its cash reserves approached what it said would be a nadir.
In its HY20 result last week the company said Mr Gunn agreed to extend the repayment of his personal $420,000 loan to the company until March 2021.
The company was slapped with a six-week ASX suspension in November because it failed to lodge its full-year accounts on time.
Shares in the company closed 49.23 per cent higher on Wednesday at a month-high 9.7 cents.
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