The Linde Acceptance ratio for the voluntary public takeover offer (exchange offer) of Linde plc (Praxair-Linde) to the shareholders of Linde AG has now reached a 90% threshold.
With this development, the $70bn mega merger of equals between Praxair, Inc. and The Linde Group moves ever nearer.
Having signed a definitive Business Combination Agreement for the merger on 1st June 2017, the ‘compelling and transformative opportunity’ has been awaiting various stages of approval since, including shareholder approval from both parties.
Praxair announced in late September that its shareholders had approved the business combination with Linde AG at a special meeting of shareholders, with approximately 83% of the total issued and outstanding shares of Praxair common stock voting to approve the business combination – exceeding the required vote of a majority of the issued and outstanding shares, and representing approximately 99% of the total votes cast.
Linde PLC (the official name of the new company) had also published an offer document regarding its voluntary public takeover offer in the form of an Exchange Offer to the shareholders of Linde AG to acquire all ordinary bearer shares without par value of Linde AG. The settlement of the Exchange Offer is subject to various closing conditions including, inter alia, an acceptance of the Exchange Offer by 75% of all Linde shares entitled to voting rights as further described in the offer document.
It was revealed on 23rd October that Linde PLC had decided to lower the minimum acceptance ratio for the Exchange Offer from 75% to 60%, following the consent by Linde AG and Praxair, Inc. and extended the acceptance period of the offer by two weeks. Lowering of the minimum acceptance ratio allowed for certain shareholders who were restricted from tendering at an earlier stage to also be included in the Exchange Offer.
As of 9th November, this acceptance ratio had achieved a threshold of 74%.
This has now reached the 90% threshold, which not only appears to move the merger a step closer, but could also have significance in German corporate law in the event of the completion of the business combination.
With such a threshold in place, Linde plc could eventually initiate a merger-related squeeze-out pursuant to section 62(5) of the German Transformation Act (Umwandlungsgesetz). gasworld understands this (generally) means the compulsory exclusion of a small group of shareholders from a company by means of an automatic transfer of their shares to the majority shareholder, by operation of law in return for (at least) a cash settlement.
A Linde statement, however, has stressed that no decision with respect to such a ‘squeeze-out’ has yet been taken.