Forum Archive Index - May 2000

[Mike Nelson <bb2345@ihug.co.nz>]

FRO
12/05/2000
GEN
 
REL: 1300 HRS Frontier Petroleum No Liability
 
GEN: FRO: FRONTIER ACQUISITION DEEMED _FAIR AND REASONABLE_
 
An independent report commissioned by Frontier Petroleum to assess its
purchase of Receivables Management Group (RMG) has declared the transaction
fair and reasonable.
The report, by Melbourne-based PKF Corporate Advisory Services, was prepared
to assess whether the purchase disadvantaged those Frontier shareholders not
associated with the vendors of RMG and the other parties to receive shares in
the company.
Late last month Frontier announced that it had entered into an agreement to
acquire what will be Australasia_s largest receivables management company.
Under the agreement, and subject to Frontier shareholder approval, Frontier
will acquire the assets and business interests of RMG and a number of
associated companies in Australia and New Zealand.
Frontier will pay a total price of $A80 ($NZ96) million satisfied by the
issue of approximately 300 million Frontier ordinary shares and $A20 ($NZ24)
million in cash. After the acquisition of RMG and the associated companies,
and subject to shareholder approval, Frontier will change its name to RMG
Limited.
The report released today says statistics and trends in the USA indicate that
the receivables management industry will continue to grow rapidly,
particularly through greater use of services currently offered and the
development of new products.
The report says the proposed transaction presents an opportunity to
significantly improve Frontier_s corporate profile by redirecting its
operations into the financial services industry, a growing sector of the
economy.
_If the Receivables Management Group achieves its growth potential in the
medium term, there should be a further increase in (Frontier_s) share price
as the market re-rates (Frontier) in line with its competitors,_ the report
says.
_Our analysis of the fair value of (RMG) indicates that significant premiums
have been placed on comparable listed companies, namely Data Advantage and
Baycorp. These premiums indicate the potential for gains to (Frontier_s)
Non-Associated Shareholders if the proposed transaction is approved. The
probability of these gains being realised is dependent upon the Receivables
Management Group being successful in providing increased higher margin
services._
Frontier chief executive John Tarrant said the report vindicated the pricing
models used to construct the transaction and showed Frontier shareholders
were significantly better off as a result of the switch to financial
services.
_Frontier is poised to become one of the pre-eminent receivables management
groups in Australia and New Zealand with the scale and capabilities that make
us a real threat to the existing players._
After the transaction is completed, the new chief executive will be Mr Paul
Cooney, a 30-year veteran of the industry and current national president of
the Australian Collectors Association.
Mr Cooney said today the independent report highlighted the opportunities
facing the receivables management industry and the position of strength RMG
would have after the merger.
_By consolidating a number of participants RMG will not only be Australasia_s
largest receivables management company, it will be the first company
operating on both sides of the Tasman to offer an integrated range of
receivables, debt management and credit reporting services under a single
umbrella,_ he said.
Also received is a copy of the Notice of Meeting to shareholders to be held
13/06/2000.
End CA:00056054 For:FRO    Type:GEN        Time:2000-05-12:13:02:37 Encrypt:Y

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