Programmed’s non-binding proposal of December 17 is being assessed by Skill’s board, but appears to be a simple transaction that proposes an equal merger – a term in vogue in corporate transaction circles that rarely proposes any sort of post-merger equality.

Under the bid Programmed and Skilled shareholders would own 50% of a combined entity that would boast a simplified balance sheet and corporate structure capable of unlocking $20 million per annum in savings.

Skilled shareholders would be offered 0.5032 of Programmed shares for each piece of Skilled paper, plus 25 cents per share cash.

In all, Skilled would be valued at $1.38/share, a premium of around 20%.

Programmed chairman Bruce Brook said the logic for creating a major staffing maintenance and facility management business was “compelling”

“We have designed the proposal as a true merger of equals, with a significant premium for Skilled shareholders so that each group of shareholders is able to share equally in more than $20 million per annum of anticipated synergy benefits,” he said.

“The merger will diversity both companies’ existing businesses and result in an appropriate merged group capital structure.”

If the deal goes ahead it would need to pass regulatory and due diligence hurdles and would need the blessing of Skilled’s board.

Skilled noted the approach and described it as “opportunistically timed” to take advantage of a recent weakness in its share price.

It has indicated that it would prefer to see a revised offer that reflects the group’s longer term average share prices.

Resource Equipment has given a more favourable response to its suitor, with the board unanimously recommending that shareholders accept Pump’s $0.26/share cash offer, which comes at an 86% premium to recent trading levels.

The board said no other offer appeared likely considering the shares were largely illiquid and likely to fall in the event the offer lapsed and that Pump already has a 47.53% interest in the target.

Resource Equipment specialises in the supply of complete pumping and dewatering systems, power generation, air compressors and associated equipment to the resources and infrastructure sectors.