Redflex Shareholders Reject Revised A$300m Bid From Macquarie and Carlyle

9th May 2011. At a Scheme Meeting of Redflex Holdings Limited (“Redflex”, ASX:RDF), held in Melbourne today, Redflex’s shareholders voted against the scheme of arrangement announced to ASX on 21 February 2011 under which an entity associated with The Carlyle Group and Macquarie Group Limited (“RoadSafety Holdings”) proposed to acquire all of the issued ordinary shares in Redflex.

Redflex’s former chairman, Chris Cooper, and supporters stopped the merger scheme dead when they defeated an amendment to the Macquarie/Carlyle offer that would have lifted the payout to shareholders to $2.75 a share.

The vote for approving the increased offer was only 63.4 per cent in favour, instead of the required 75 per cent, while the vote on the primary resolution later fell to only 59.9 per cent in favour and 40.1 per cent against.

The shares were worth $1.535 before the company announced in June, 2010 it had received an informal, non-binding takeover approach from Macquarie at $2.50 a share. In February 2011, Redflex’s board revealed and urged the company’s shareholders to accept the $2.70 a share joint bid by Macquarie and Carlyle.

Redflex’s Board had unanimously recommended the Consortium’s original proposal, as well as its revised and improved proposal. The Board stated they were “disappointed that the requisite majorities for the Scheme were not obtained, particularly given that over 80% of Redflex shareholders by number who voted at the Scheme Meeting (in person, by proxy or by corporate representative) were
supportive of the transaction proceeding.

The improved minimum consideration of A$2.75 cash per share which the Consortium had offered compares to the last closing price of Redflex shares on 12 May 2011 of A$1.85 per share.

The Sydney Morning Herald described the situation as a “debacle” with “shell-shocked investment bankers, along with Redflex executives and directors, milling around at the end of the meeting in central Melbourne which, in spite of its outcome, had almost no debate on the floor.” It said it marked the “demise of Macquarie’s three-year campaign to be involved in controlling Redflex, was made worse when Computershare’s electronic voting system apparently mis-recorded the results of a key vote”.

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