Australia's Citadel gets S$445m bid from Pacific Equity, shares surge

[SYDNEY] Shares of Australian software company Citadel Group Ltd surged on Monday after an entity owned by the country's biggest private equity firm Pacific Equity Partners (PEP) proposed to buy it for A$448.6 million (S$445 million).

Tech-focused companies are seen as winners in the Covid-19 era as the shift to working from home drives people to leverage technology to get things done efficiently and remotely.

Shares of Citadel jumped as much as 41 per cent to A$5.63 cents, just short of PEP's offer price of A$5.70 per share as investors left room for the possibility of sale discussions falling through.

The deal will take place via a scheme of arrangement, with the offer representing a premium of 43.2 per cent to Citadel's closing price on Friday.

Citadel Chairman Peter Leahy said its customers will benefit from access to a broader product suite and service capability with PEP's backing.

The board has recommended that shareholders vote in favour of the deal in the absence of a superior bid, the Canberra-based information technology services provider said.

The company, which posted a 25 per cent jump in annual core earnings last month, said it plans to declare a special dividend of up to A$0.15 per share that will enable shareholders to receive up to A$0.06 of franking credit benefits.

REUTERS