Canada's Genivar makes C$442 million cash offer for WSP

Thu Jun 7, 2012 5:53pm EDT
 
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TORONTO (Reuters) - Canadian engineering company Genivar Inc GNV.TO said on Thursday it is offering to acquire British consulting firm WSP Group PLC WSPG.L in a cash deal valued at approximately C$442 million ($431.54 million).

Montreal-based Genivar said that it will offer 4.35 pounds ($6.78) for each WSP share, representing a premium of about 67 percent to WSP's closing price on Wednesday.

The transaction will immediately add to earnings per share without factoring any cost synergies, said Genivar, adding that it had support for the tie-up from shareholders representing 35.1 percent of WSP's shares.

WSP, based in London, has more than 9,000 employees and revenue of about C$1.1 billion for the year ended December 31, 2011.

The deal, seen closing by July 31, will create a company with combined revenue of C$1.8 billion, earnings before interest, tax, debt and amortization of C$172 million and expertise in building, transport, infrastructure, industrial, energy and environment markets, Genivar said.

To finance a portion of the deal, a syndicate of underwriters will sell Genivar subscription receipts at C$24 apiece, for gross proceeds of C$225 million, with an over-allotment option worth up to C$34 million.

Genivar also announced a concurrent private placement deal with the Canadian Pension Plan Investment Board and Caisse de Depot et Placement du Quebec worth C$197 million. Under that offering, both the CPPIB and Caisse will hold a 14.6 percent stake in Genivar.

WSP Chief Executive Christopher Cole will become chairman of Genivar's board after the deal closes and Genivar CEO Pierre Shoiry will maintain his position.

(Reporting By Susan Taylor; Editing by Leslie Adler)