ROVworld Subsea Information

Clough And Forge Create Long Term Strategic Alliance
Date: Friday, March 05, 2010 @ 06:32:25 EST
Topic: ACQUISITION/MERGER NEWS


CloughClough to take strategic position in Forge, $19.5M placement and 50% cash proportional takeover offer.

Clough and Forge have agreed to create a Strategic Alliance which provides the foundation for long-term strategic co-operation between the companies.



  • Clough to become cornerstone investor in Forge – potential investment range of $55-98 million.1
  • Targeting substantial increases in project revenues for both companies with material positive impact on earnings.
  • Key transaction components include:
    • Clough investing approximately $19.5m in Forge via a 15% share placement (“Placement”) subject to shareholder approval.
    • On Placement approval and completion, Clough intends to make a proportional cash takeover offer at $2.10 per share to all existing Forge shareholders for 50% of their shares in Forge (“Offer”).
    • Clough to become a cornerstone investor in Forge with a potential shareholding of 31%-56.5%, depending on Offer acceptance level.2
    • Strategic Alliance Agreement between the companies to leverage complementary services in the oil and gas, mining and civil infrastructure sectors.
  • Supported by Forge’s Board of Directors and major shareholders in the absence of a superior proposal.

The Boards of Clough Limited (“Clough”, ASX: CLO) and Forge Group Limited (“Forge”, ASX: FGE) are pleased to announce the intention to create a new Strategic Alliance to jointly target project opportunities in the LNG / oil and gas sectors and to support Forge’s anticipated continued growth.

The Strategic Alliance will be underpinned by Clough becoming a cornerstone shareholder in Forge, creating an alignment of interests that aims to generate substantial benefits for both companies in FY11 and beyond through a material, positive impact on their earnings.

The Strategic Alliance and cornerstone shareholding will be facilitated through a series of transactions for a potential maximum investment by Clough of approximately $98 million.

 

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1 Subject to: (i) Forge shareholder approval of the Placement to Clough; (ii) the 50% proportional takeover offer by Clough being made and becoming unconditional; (iii) the level of acceptances under the Offer; and (iv) the acquisition of 3 million Forge options from existing Forge optionholders.
2 Also subject to Forge shareholder approval of the placement to Clough.







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