TASK agrees to scheme agreement with PAR Technology
Scheme - TASK Group Holdings Limited (ASX:TSK) (TASK or the Company) and PAR Technology Corporation (NYSE:PAR) (PAR) have entered into a Scheme Implementation Agreement under which it is proposed that PAR will acquire 100% of TASK by way of a Scheme of Arrangement (Scheme). TASK shareholders will have the ability to receive the Scheme consideration in cash or scrip by way of a mix and match facility¹.
Cash Consideration - Under the Scheme, TASK shareholders will have the opportunity to elect to receive consideration of 100% cash at a price of A$0.81 per TASK Share (Cash Consideration). The Cash Consideration represents a 103% premium to the TASK closing price of A$0.40 per share on 8 March 2024 and a 107% premium to the 30-day volume weighted average price.
Mixed Consideration - Alternatively, under the Scheme, TASK shareholders will have the opportunity to elect to
receive up to 50% of their consideration in shares of PAR common stock (PAR Shares) at a ratio of 0.015 PAR Shares for each TASK share held (Share Consideration) with the balance payable in Cash Consideration (Mixed
Consideration). Based on the closing price of PAR Shares on 8 March 2024 (Eastern Daylight Time) of $US43.41 per PAR Share, the Share Consideration implies a value of A$0.98 per TASK Share.
PAR is a leading global restaurant technology company and provider of unified commerce for enterprise restaurants. PAR’s restaurant hardware, software, loyalty, drive-through, and back-office solutions is used in more than 70,000 restaurants in more than 110 countries.
TASK’s Board unanimously recommends that TASK shareholders vote in favour of the Scheme in the absence of a superior proposal and subject to an Independent Expert concluding (and continuing to conclude) that the Scheme is in the best interest of TASK’s shareholders.
Scheme Overview
TASK is pleased to announce that it has entered into a Scheme Implementation Agreement (SIA) with PAR. Under the SIA it is proposed that PAR will acquire 100% of TASK’s shares by way of a Court-approved scheme of arrangement for a total implied price of A$0.81 TASK share. The Scheme values TASK’s equity at A$310m². A 100% take-up of the 50% scrip consideration alternative implies a value for TASK's equity of A$343m based on the closing price of PAR Shares on 8 March 2024 (Eastern Daylight Time) of $US43.41 per PAR Share³.
Under the terms of the Scheme, TASK shareholders will have the option to elect to receive their scheme consideration in one of two ways:
Cash Consideration, where shareholders can elect up to 100% cash consideration of A$0.81 cents cash per Target share held;
Mixed Consideration, where shareholders can elect up to 50% scrip consideration equating to 0.015 PAR Shares for each TASK share held, with the balance payable as Cash Consideration.
TASK shareholders who do not make an election or who make an invalid election will receive the Cash Consideration.
TASK will apply for a ruling from the Australian Taxation Office (ATO) in relation to the availability of scrip-for-scrip capital gains tax rollover relief (Rollover Relief) in regards to the transaction for TASK shareholders in Australia. Rollover Relief is expected to be available, and receipt of confirmation of such ruling is a condition precedent to the transaction.
Scheme Conditions
Implementation of the Scheme is subject to limited customary conditions including, amongst other things: receipt of required regulatory approvals (including FIRB and OIO approvals);
the approval of TASK shareholders in accordance with the Corporations Act;
no material adverse effect, prescribed events or breach of representations and warranties in relation to either TASK or PAR;
receipt of confirmation of the ATO class ruling;
valid elections to receive the Mixed Consideration having been received from Task shareholders, such that the Share Consideration will comprise at least 18% of the aggregate Scheme consideration;
the PAR Shares issuable as Share Consideration having been approved for listing on NYSE; and
other customary conditions to a scheme of arrangement such as Australian court approval and an Independent Expert concluding (and continuing to conclude) that the Scheme is in the best interests of TASK shareholders.
Implementation of the Scheme is not subject to any financing condition.
Scheme Implementation Agreement
The SIA contains customary exclusivity provisions including “no shop” and “no talk” restrictions, a notification obligation and a matching right in favour of PAR, subject to TASK Directors’ fiduciary obligations where appropriate.
The SIA also provides for a break fee of A$1.3m payable by TASK to PAR under certain circumstances and for a reverse break fee of A$1.3m payable by PAR to TASK also under certain circumstances.
The Scheme is expected to be implemented in the third quarter of 2024 subject to TASK shareholder approval, court approval, and other relevant conditions being satisfied or waived.
Full details of the Scheme are set out in the SIA, a copy of which accompanies this announcement.
TASK Board Recommendation
The TASK Board unanimously recommends that TASK shareholders vote in favour of the Scheme, and each Director intends to vote all of the TASK shares controlled or held by, or on behalf of, them in favour of the Scheme, in the absence of a superior proposal and subject to an Independent Expert concluding (and continuing to conclude) that the Scheme is in the best interests of TASK shareholders. The TASK Board makes no recommendation in relation to the mix and match election, which is a decision for each individual TASK shareholder. The TASK Board believes the Scheme provides:
Significant premium for control:
a premium of 103% to the closing price of TASK shares on 8 March 2024 (based on the Cash Consideration);
a premium of 107% over the 30-day volume weighted average price of A$0.39 per share to 8 March 2024 (based on the Cash Consideration);
Certainty of value: The Scheme provides certainty of value to TASK shareholders with the opportunity to sell 100% of their shareholdings for cash;
Potential for additional future value: The option to elect for up to 50% Share Consideration allows TASK shareholders to benefit from any increase in the value of PAR over time. The combination of TASK and PAR has the potential to create meaningful synergies through:
expanding PAR’s geographic coverage and providing a platform for international growth of PAR’s business;
adding TASK’s complimentary customer base of major hospitality, stadium, foodservice and casino groups; and
enhancing PAR’s produce suite with Task’s state-of-the-art end-to-end customer engagement and transaction platform.
Daniel Houden, the CEO of TASK, said today: “I am excited by the combination of TASK and PAR. It offers TASK a better base on which to achieve its international ambitions, provides a strong group with significant opportunities for our employees and provides certainty for our shareholders who have supported the growth of TASK to become a meaningful player in the global retail software market.”
Savneet Singh, the President & CEO of PAR Technology, said today: “The combination of the two most complete technology solutions in our industry is incredibly exciting, together PAR and TASK will serve our respective customers globally and create a talent base we believe to be unmatched in the industry.”
Major shareholders support Scheme
TASK shareholders Kym Houden and TASK Retail Investment Pty Ltd, have each separately advised TASK that they intend to vote all TASK shares held or controlled by them (in aggregate approximately 18% of the issued TASK shares) in favour of the Scheme in the absence of a superior proposal being publicly announced before the Scheme Meeting and subject to the Independent Expert concluding (and continuing to conclude) that the Scheme is in the best interests of TASK shareholders.
Indicative Timetable and Next Steps
TASK shareholders do not need to take any action at this stage.
Subject to Court Approval, a Scheme Booklet is expected to be provided to TASK shareholders in late April 2024.
The Scheme Booklet will contain information relating to the Scheme, the reasons for the TASK Board’s unanimous recommendation, details of the Scheme meeting as well as an Independent Expert’s Report providing an assessment as to whether the Scheme is in the best interests of TASK shareholders. TASK shareholders will then have the opportunity to vote on the Scheme at a court-convened Scheme Meeting, which is currently expected to be held in or around June 2024.
TASK will keep shareholders and the market informed in accordance with its continuous disclosure obligations.
Advisers
TASK is being advised on the proposed Scheme by Latimer Partners as corporate adviser and King & Wood Mallesons as legal adviser.
Read the full announcement here
¹ - Each TASK shareholder will be able to choose to maximise either cash or up to 50% of the consideration in PAR scrip.
² - Equity offer value assuming total issued securities of 382m including Options, Restricted Share Units and Deferred Share Rights, at the Scheme Cash Consideration price of $0.81 per share.
³ - Equity offer value assuming total issued securities of 382m including Options, Restricted Share Units and Deferred Share Rights, at an implied price of $0.90 per TASK share for a Mixed Consideration 50% scrip election.