Magna Pacific rejects takeover
February 02, 2007
IT WAS lights, camera, rejection after Brisbane-based DVD distributor Magna Pacific knocked back a takeover offer from Lionsgate Australia.
Magna shares soared 19 per cent after Lionsgate, a subsidiary of North America's largest independent film distributor, said an offer had been made to acquire the company for 32¢ a share.
But managing director Allan Radley said the offer was "way underpriced".
"We moved into new premises right on the water last year . . . and we've had real estate agents give us some indicative numbers that were way above what we paid for it," he said.
"We understand that the last year has been disappointing for our shareholders . . . it's a product-driven industry and we just haven't had the product. But from here on in we believe we'll see the rewards with four (titles) coming out in the next six months."
Mr Radley said Magna would seek legal advice, but remained open to further offers. "Absolutely. If the offer was fair and reasonable for our shareholders then we'd certainly assess that," he said.
Lionsgate chairman Simon Franks said the premium being offered was at the higher end in the Australian market over the last year.
He said the fact Magna's largest shareholder, Macquarie Bank, had accepted the offer was indicative of the concern about the company's future.
"Magna's average share price for the last few months has been around 22¢ and 23¢. I genuinely think shareholders will be relieved to have an opportunity to exit Magna."
Mr Franks said if the bid was successful, Lionsgate would overhaul Magna's business model but had no plans to move it from Brisbane.
Magna shares yesterday gained 5.5¢ to 34¢.
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