Taylor Maritime Investments Ltd. said Wednesday that it has conditionally agreed to buy Grindrod Shipping Holdings Ltd., valuing Grindrod’s entire issued share capital at around $506 million.
The dry bulk-shipping investment company said that under the agreement, Grindrod shareholders will get $21 in cash for each share from Taylor. Subject to the offer fulfilling certain conditions, Grindrod will also pay a special dividend to shareholders of $5.
The total $26.0 per share value represents a 6.1% premium to Grindrod’s closing share price on Monday.
Taylor currently holds a roughly 26% stake in Grindrod. It said the strategic combination will create a significant market player in the mid-sized dry-bulk industry, provide other shareholders the certainty of a cash exit at a premium, and has the potential to generate defensive earnings and sustainable dividends.
Grindrod’s management have preliminarily recommended shareholders accept the offer.
The company said that, subject to shareholder approval, it will amend the terms of its investment policy to allow the acquisition.
Taylor also said it has agreed to sell a vessel for net proceeds of $20.1 million to support the acquisition, with the sales expected to complete by the end of November.
Shares at 0741 GMT were down 0.4% at $1.20.