Shanks Group and VGG amend merger consideration

16th Sep 2016 15:11

(ShareCast News) - Shanks Group updated the market on its proposed merger with van Gansewinkel Groep on Friday.The London-listed firm said significant progress had been made on transaction and due diligence, with the exclusivity agreement with VGG and its two largest shareholders extended for a further short period.Merger terms remained materially unchanged, the board reported, with the implied headline value of VGG increasing in line with the appreciation of Shanks' share price since the announcement on 7 July to €484m on a debt-free cash-free basis, which it said reflected positive stock market reaction to the proposed merger.The consideration mix has been aamended to reduce the share consideration by approximately €60m and increase the cash consideration accordingly, in order to enable VGG's existing debt to be repaid at completion."Based on the closing Shanks share price of 102.25p on 15 September 2016, the proposed consideration payable by Shanks would now be cash consideration of approximately €286m, and share consideration representing approximately 23% of the enlarged issued share capital following completion," the board said in a statement.It reported that VGG is trading significantly ahead of budget and compared to management expectations earlier this year, and that Shanks overall current trading for the year to date is in line with management's expectations at constant currency.