Announcement

TRANSACT: MVN: Methven and GWA enter into Scheme Implementation Agreement 10:30am 
MVN
14/12/2018 10:30
TRANSACT
PRICE SENSITIVE
REL: 1030 HRS Methven Limited

TRANSACT: MVN: Methven and GWA enter into Scheme Implementation Agreement

Methven and GWA enter into Scheme Implementation Agreement

Highlights

o Methven has entered into a Scheme Implementation Agreement with GWA,
valuing Methven at $118m.

o The total value to Methven shareholders is up to $1.65 per share comprising
an offer price of $1.60 per share plus a permitted dividend of up to 5 cents
per share.

o GWA recognised the strategic merits of a partnership with Methven, and has
presented a compelling offer which is subject to shareholder and court
approval.

o Methven's Independent Directors have recommended the offer, subject to no
superior proposal arising and Grant Samuel's independent adviser report
concluding the offer price is within or above its valuation range.

o The maximum value to Methven shareholders represents a 43% premium on
yesterday's close and prices in future growth opportunities for Methven
shareholders.

o Methven's Jomac Place facility in Auckland becomes the innovation hub for
showers and taps for the enlarged group.

o Irrevocable undertaking to vote in favour of the scheme provided by 19.9%
shareholder, Lindsay Investment Trust, subject to there being no superior
proposal.

o Shareholders to vote on the transaction at Extraordinary General Meeting
expected to be held in March 2019.

Methven Limited ("Methven") is pleased to announce that it has entered into a
Scheme Implementation Agreement ("SIA") with GWA Group Limited ("GWA"), which
would see the Australian-listed kitchen and bathroom group purchasing all of
the shares in Methven subject to shareholder and court approval and other
conditions being met.

The total value to Methven shareholders of up to $1.65 per share, is
comprised of an offer price of $1.60 cash per share ("Offer Price") plus a
permitted dividend of up to $0.05 per share payable out of first half FY19
profits ("Permitted Dividend").

In entering into the agreement with GWA, the Methven Board considered
Methven's growth aspirations and international revenue and earnings momentum,
and concluded that the value offered by GWA provided shareholders with an
early benefit of projected future value uplift without the risk. The Board
also concluded the two businesses were strategically and culturally
complementary, operating in similar product categories, with similar growth
aspirations and aligned values, making GWA an obvious partner.

Methven is a proud New Zealand manufacturer and innovator, and it was crucial
for the Board and our largest shareholder Lindsay Investment Trust that
Methven's manufacturing and innovation expertise is maintained in New Zealand
as part of the transaction. Finding a partner who not only supported this
strategy, but actually wanted to extend it to become the innovation hub for
showers and tapware for the enlarged group, created an even more compelling
proposition.

Methven's largest shareholder Lindsay Investment Trust intends to vote all of
its Methven shares in favour of the Scheme, subject to no superior proposal
arising.

GWA has made certain commitments that it will support the design, innovation
and manufacturing base for Methven's taps and showers business in New
Zealand. This will ensure that Methven's taps and showers business in
Auckland, New Zealand remains an innovation and research and development
centre for GWA's overall business and that, as a consequence, jobs relating
to these functions are retained in New Zealand.

The transaction will be implemented by way of a scheme of arrangement
("Scheme"), which is a process under which a meeting of shareholders is
called and a vote is conducted to approve the sale. No date for that meeting
has been set as yet but it is expected to be held in March 2019. The Scheme
is also conditional on approval of the High Court and the New Zealand
Overseas Investment Office.

The Independent Directors of Methven have commissioned Grant Samuel to
prepare an independent adviser's report to assist them and Methven's
shareholders in assessing the merits of the Scheme. That report is expected
to be sent to shareholders in February 2019 along with Methven's Notice of
Meeting.
Subject to Grant Samuel's report concluding that the offer price of $1.60 per
Methven share is within or above Grant Samuel's valuation range, and no
superior proposal arising, the Independent Directors:

o recommend that Methven's shareholders vote in favour of the Scheme; and

o intend to vote their Methven shares (or those of their associates) in
favour of the Scheme.

Subject to reviewing Grant Samuel's report, the Independent Directors of
Methven believe that the Scheme represents a compelling offer. The maximum
value of $1.65 per share offered to shareholders through the Offer Price and
Permitted Dividend represents:

o An EV/EBIT multiple (for the 12 months ending 30 June 2018) of 13.5x;

o A premium of 43% to Methven's closing price of $1.15 on 13 December 2018,
the last trading day before the SIA was announced; and

o A premium of 50% to Methven's volume weighted average price for the 12
month period to 13 December 2018.

o A value higher than Methven's share price has been at any time in the last
7 years.

Methven Chair Alison Barrass said the attractive offer from GWA demonstrated
a high level of confidence in Methven and is an endorsement of the
transformation that has taken place in the business in recent years.

She added "The Board remains confident that Methven is well positioned to
deliver growth across all its divisions by leveraging its core intellectual
property and award-winning designs. However, the value offered, which
includes the Permitted Dividend, is highly attractive as it does acknowledge
future growth in Methven and allows shareholders to realise value today."

Mrs Barrass said that given there was a high level of understanding between
both parties, a Scheme proposal was seen as the best and fairest way of
expediting this transaction and providing certainty of outcome within a
defined timeframe at an agreed and compelling value.

A scheme of arrangement is a court-approved process. The exact details of
the Methven shareholder meeting to approve the Scheme will be put to the High
Court for approval ahead of a Methven shareholder meeting to consider the
Scheme expected to be held in March 2019. The Scheme requires the approval
of both (i) 75% of all votes cast by shareholders in each interest class; and
(ii) 50% of the total voting rights attaching to Methven shares (whether or
not voted).

Mrs Barrass said "The Independent Directors strongly encourage shareholders
to consider the materials that will be provided, and to exercise their right
to vote either in person or by proxy. By voting, shareholders can have their
say in determining the future of their investment in Methven."
Methven is being advised by Forsyth Barr Limited and Simpson Grierson.

Attached are:

1. Copy of the release
2. Scheme Implementation Agreement

For more information, please contact:
Geoff Senescall, Senescall Akers, +64 21 481 234,
senescall@senescallakers.co.nz
End CA:00328372 For:MVN Type:TRANSACT Time:2018-12-14 10:30:47

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