Reliance Worldwide Corporation has signed a binding scheme implementation deed for Brookfield to acquire all shares for US$3.38 each, equivalent to about A$4.75 at the stated exchange rate. The recommended deal now enters a limited window for rival proposals before shareholder, court and regulatory approvals are sought.
- US$3.38 cash offer per RWC share
- Approximately 31.5% premium to the undisturbed last close
- Go-shop period runs until 15 October 2026
- RWC board unanimously recommends the scheme
- Completion expected in the first quarter of 2027, subject to conditions
Brookfield Offer Moves From Proposal to Binding Deal
Brookfield has turned months of courtship into a binding takeover proposal for Reliance Worldwide Corporation Limited (ASX:RWC), agreeing to pay US$3.38 cash for every RWC share through a scheme of arrangement. At the AUD/USD exchange rate used by the company, that equates to approximately A$4.75 per share and values the transaction at about US$2.9 billion on a post-AASB16 basis.
The offer represents premiums of approximately 31.5% to RWC’s undisturbed last close, 32.7% to its three-month VWAP and 43.0% to its six-month VWAP. The US dollar denomination is designed to align with RWC’s reporting currency, cash flows and declared dividends, although shareholders choosing Australian dollars will receive an amount determined by the exchange rate immediately before implementation.
Go Shop Gives Rival Bidders Until 15 October
The agreement does not shut the door on a competing offer immediately. RWC can solicit alternative proposals, provide due diligence access and negotiate with other parties until 15 October 2026. It can also terminate the deed to pursue a superior proposal, subject to Brookfield’s matching right.
After that period, customary no-shop, no-talk and no-due-diligence restrictions apply, subject to fiduciary exceptions. Brookfield will have five business days to match an equivalent or superior competing proposal. A US$25.3 million break fee may be payable to Brookfield in specified circumstances, while the same amount is payable by Brookfield to RWC in certain circumstances, including if the scheme becomes effective but the consideration is not paid.
Board Recommendation and Funding Structure
RWC’s directors unanimously recommend that shareholders vote in favour of the scheme, provided there is no superior proposal and the Independent Expert concludes that it is in shareholders’ best interests. Each director intends to vote shares held or controlled by them in favour, subject to those qualifications.
Grant Thornton Corporate Finance has been appointed Independent Expert, with its report expected to accompany the Scheme Booklet in November 2026. Brookfield has secured an equity commitment of up to US$1.5 billion and debt commitments of up to US$1.65 billion, including a US$300 million asset-based revolving facility and a US$1.35 billion term facility. The debt remains subject to customary conditions.
Approvals Set the Route to First Quarter 2027
The transaction still requires shareholder and court approval, an acceptable Independent Expert conclusion and regulatory clearances including FIRB, ACCC, Hart-Scott-Rodino, German and Ukrainian competition approvals. It is also conditional on matters including no material adverse change and the treatment of RWC’s equity incentives.
Implementation is currently expected in the first quarter of 2027, although the end date under the deed is 30 June 2027. If completion has not occurred by 31 March 2027, Brookfield will pay an additional 0.0263 US cents per share per day from 1 April until implementation. The immediate test is whether the go-shop produces a competing bid strong enough to challenge a board-backed offer that is now contractually defined but not yet complete.
Bottom Line?
The binding deed removes much of the uncertainty around Brookfield’s offer, but the 15 October go-shop deadline and subsequent approval process still leave the final outcome open.
Questions in the middle?
- Will another bidder emerge before the 15 October go-shop deadline?
- Will the Independent Expert support the scheme at the stated valuation?
- How will currency movements affect shareholders electing Australian dollar consideration?