RHI and Magnesita are to merge creating one of the leading global refractory companies that will operate under the new name of RHI Magnesita.
RHI AG and the controlling shareholders of Magnesita Refratários SA, investment vehicles affiliated with GP Investments and Rhône Capital, and together with GP (Magnesita’s Controlling Shareholders) agreed to combine the operations of RHI and Magnesita.
Accordingly, RHI’s Management Board has agreed to sign a share purchase agreement with Magnesita’s controlling shareholders regarding the acquisition of a controlling stake of at least 46 per cent, but no more than 50 per cent plus one share of the total share capital in Magnesita, pending RHI’s Supervisory Board approval.
The purchase price for the 46 per cent stake will be paid in cash amounting to EUR118m and 4.6m million new shares to be issued by RHI Magnesita, a new RHI entity to be established in the Netherlands and listed in London.
The exchange ratio applied in the transaction is 0.19 newly issued RHI Magnesita shares for 1 Magnesita share. Based on RHI’s six-month volume weighted average price of EUR19.52 as of 4 October 2016, the implied value of the 46 per cent stake amounts to EUR208m, implying a value for Magnesita’s entire share capital of EUR451m.
As a result of the transaction, GP will become a relevant shareholder of RHI Magnesita. The combined company’s corporate governance will be constituted on a one-tier board structure, while GP will be represented on the board of directors.
