- The stock price of Aegion Corporation (Nasdaq: AEGN) increased by over 7% during intraday trading. This is why it happened.
The stock price of Aegion Corporation (Nasdaq: AEGN) – a company that is pioneering a role in finding innovative solutions to rehabilitate aging infrastructure, primarily pipelines in the wastewater, water, energy, mining, and refining industries – increased by over 7% during intraday trading. Investors appear to be responding positively to the company announcing that it has entered into a second amendment to the definitive merger agreement with affiliates of New Mountain Capital, L.L.C. to increase the consideration payable to holders of outstanding shares of Aegion common stock to $30 per share in cash from $27 per share in cash.
This revised transaction price represents a total enterprise value of $1.1 billion, including net debt. The revised per-share price represents a premium of 40% and 48% to Aegion’s closing share price and 30-day VWAP, respectively, as of February 12, 2021, the last trading day prior to announcing the definitive merger agreement with New Mountain.
Pursuant to the amendment – as consideration for the increased purchase price – the break-up fee payable by Aegion in certain circumstances has increased from $40 million to $50 million. And the termination fee payable by Buyer to Aegion in certain circumstances has also increased from $70 million to $90 million.
Aegion’s Board of Directors gave due consideration to a revised proposal received from an unsolicited third party to acquire 100% of the shares of Aegion for $30 per share in cash. The Third-Party Proposal had followed discussions and negotiations between the Third Party and management in the last few weeks following the disclosure on March 22, 2021, of the Board’s determination that an unsolicited proposal from the Third Party for $28.50 per share in cash could reasonably be expected to result in a “Superior Proposal.”
And in making its decision, the board had carefully assessed the relative benefits and risks of the revised proposals from both New Mountain and the Third Party. The Board determined that, based on the consideration payable to stockholders and the superior certainty and anticipated timing to close the transaction with New Mountain, Aegion’s entry into the amendment with New Mountain is in the best interests of Aegion’s stockholders.
Aegion’s Board of Directors recommends that Aegion stockholders vote to approve the amended New Mountain Merger Agreement and related proposals at the special meeting of Aegion stockholders scheduled for May 14, 2021. Stockholders of record as of March 31, 2021, are entitled to vote at that meeting.
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