Silver Chef takeover heats up as Blue Stamp demonstrates its worth

Written on the 12 September 2019 by David Simmons

Silver Chef takeover heats up as Blue Stamp demonstrates its worth

The battle for the heart of Silver Chef (ASX: SIV) is fast becoming an episode of The Bachelor, with the company's two suitors turning up the heat over the last two days.

In one corner there is Next Capital, an investment firm looking to acquire Silver Chef's hospitality business after previous attempts to take over the entirety of Silver Chef were dismissed by irritated shareholders.

In the other corner is Blue Stamp Company, a fund manager hoping to buoy the struggling Silver Chef by way of a proposed $60 million recapitalisation offer.

The two non-binding offers are now on the table, so who will Silver Chef offer the final rose to?

Yesterday, Next Capital came out swinging against Blue Stamp, claiming that its offer to buy out Silver Chef's hospitality business was superior to Blue Stamp's recapitalisation offer.

The Sydney based private equity firm also claimed that there was "considerable uncertainty" as to whether Blue Stamp even had the money available to recapitalise Silver Chef in the first place.

Those fears have been somewhat assuaged today, with Silver Chef telling shareholders that it has received $45 million in cash from Blue Stamp; evidence that Blue Stamp does in fact have the capital available to recapitalise Silver Chef.

Additionally, Blue Stamp has made substantial investments in Silver Chef, and now owns 19.99 per cent of Silver Chef's shares, which Silver Chef says gives Blue Stamp "strong incentive to progress and implement its proposed recapitalisation".

While Silver Chef does not have to accept either offer, with both being non-binding and conditional, the company is in dire straits at the moment, and either offer would certainly be helpful.

The group has fallen far from its peak in 2016 when it was trading at $11.67 with a market capitalisation of $525 million. Today the group has a market cap of just $27 million.

Silver Chef has been beset by financial issues since it dumped the GoGetta equipment financing brand early last year and as of 30 June 2018 it remained in breach of debt agreements.

The company sought waivers from its financiers to undertake a capital raising of $45 million to repay these debt facilities. The company recently received its third extension on the repayment of that debt facility to 30 November 2019.

Silver Chef is currently in the process of determining which of the two offers on the table it will take up.

"The board of Silver Chef considers it must explore both proposals and continue negotiations with its financiers, BSC and Next Capital to determine the most favourable outcome for Silver Chef shareholders," says Silver Chef.

Shares in Silver Chef are up 4.55 per cent to $0.69 per share at 1.08pm AEST.

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Author: David Simmons

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