Shareholders of printed circuit board maker CEI will not receive the company’s final dividend for FY2020 if they vote against the takeover of the company by AEM Holdings.
In an April 5 release, AEM announced that it will be voting against the upcoming Dividend Resolutions at CEI’s upcoming annual general meeting on April 19. The resolutions propose a one-tier tax-exempt third and final dividend of 0.4 cents per share and a one-tier tax-exempt and special dividend of 2.6 cents per share respectively.
AEM offered to privatise CEI at $1.15 a share earlier this year, and acceptance of the offer crossed the 50% mark on 19 March, turning it unconditional and making CEI an indirect subsidiary of AEM.
As such, AEM may “review and make changes to the Company’s (referring to CEI) existing practice regarding the payment of dividends to shareholders, having regard to the AEM Group’s dividend policy and factors including but not limited to the Company Group’s retained earnings, financial position, capital expenditure requirements, future expansion and investment plans."
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For CEI’s shareholders who have voted or will vote in favour of AEM’s takeover, there will be no impact on them, as the Offer Settlement Date would fall before the record date of May 7 for the dividends, and as such, these shareholders would therefore not, in any case, be entitled to the dividends.
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As for the rest of CEI’s shareholders who did not tender their shares in acceptance of the offer, AEM said in the event that it becomes entitled to compulsorily acquire all remaining offer shares not acquired under the offer - which will require acceptance of 90% of CEI shares - the Offer Consideration payable will remain at $1.15 per share.
However, should AEM fail to reach the 90% mark where it can acquire all the remaining offer shares not acquired under the offer, CEI shareholders who do not tender their shares in acceptance of the offer would not receive the dividends or the Offer Consideration.
AEM explained that it is “of the view that it would be in the best interests of CEI for the cash, which would otherwise be distributed to shareholders under the dividends, to be retained by CEI, in order to fund future growth and expansion and to optimise operational needs going forward.”
