Xref Faces Uncertainty as Shareholders Vote on SEEK Acquisition Scheme
Xref Limited shareholders convened to vote on SEEK Limited’s proposed $0.218 per share acquisition, representing a substantial premium over recent trading prices. The outcome hinges on shareholder and court approval, marking a pivotal moment for the software company’s future.
- SEEK proposes $0.218 per share acquisition of Xref, valuing company at ~$41.85 million
- Offer represents a 61% premium over pre-announcement share prices
- Scheme Meeting held as hybrid event with voting underway
- Independent Expert deems scheme fair and reasonable
- Xref Board unanimously recommends shareholder approval absent superior proposal
Context of the Scheme Meeting
On 3 February 2025, Xref Limited (ASX: XF1) held a crucial Scheme Meeting to consider the proposed acquisition by SEEK International Investments Pty Ltd, a wholly owned subsidiary of SEEK Limited. The acquisition offer values Xref at approximately $41.85 million, with a cash consideration of $0.218 per share. This figure represents a significant premium over Xref’s share price prior to the announcement of its strategic review in May 2024.
The meeting was conducted in a hybrid format, allowing shareholders to participate either in person at Sydney’s Level 10, 2 Park Street, or virtually via Zoom. This approach reflects the evolving norms of shareholder engagement in the digital age.
Premium Offer and Strategic Review Background
The acquisition proposal emerged following a strategic review initiated by Xref in May 2024 after multiple parties expressed interest in the company. SEEK was the sole party to submit a formal indicative proposal in September 2024, which culminated in a Scheme Implementation Deed signed in November 2024.
The $0.218 per share offer translates to a 61% premium over the undisturbed share price of $0.135 before the strategic review announcement, and a 41% premium over the 30-day volume weighted average price prior to the announcement. This premium is notable, especially given that the offer price exceeds the highest share price recorded in the prior 12 months.
Board and Independent Expert Endorsement
Xref’s Board of Directors has unanimously recommended shareholders vote in favor of the Scheme, contingent on the absence of a superior proposal. The Board’s confidence is bolstered by an independent expert report from BDO Corporate Finance Australia Pty Ltd, which concluded the Scheme is fair and reasonable and in the best interests of shareholders.
Notably, the Board members holding shares have committed to voting their holdings in favor of the Scheme, signaling strong internal support. The absence of any competing superior proposals further consolidates the likelihood of the Scheme’s approval.
Voting Mechanics and Next Steps
Voting on the Scheme Resolution is conducted by poll, requiring a majority in number of shareholders and at least 75% of votes cast to pass. Proxy votes already indicate a favorable tilt, with over 62% of proxy votes in support and the Chair’s undirected proxies also committed to the Scheme.
Should shareholders approve the Scheme, the next procedural step is the Supreme Court of New South Wales’ approval scheduled for 10 February 2025. Upon court sanction, the Scheme will become effective, with trading in Xref shares expected to cease on 11 February 2025. Shareholders on record by 13 February will receive the Scheme consideration, with payments anticipated on 20 February 2025.
Implications for Shareholders and Market
The all-cash offer provides shareholders with certainty of value and eliminates exposure to ongoing operational risks inherent in Xref’s business. However, some shareholders may prefer to retain their investment to participate in potential future growth or await a superior proposal, which the Board currently deems unlikely.
Tax considerations and individual risk appetites will also influence shareholder decisions. The premium offered, combined with the Board’s recommendation and independent expert endorsement, positions the Scheme as a compelling exit opportunity for many investors.
Bottom Line?
As Xref shareholders cast their votes, the market awaits confirmation of a deal that could reshape the company’s trajectory under SEEK’s ownership.
Questions in the middle?
- Will any last-minute superior proposals emerge to challenge SEEK’s offer?
- How will the integration with SEEK impact Xref’s technology and customer base?
- What are the potential tax implications for shareholders accepting the Scheme?
