Crimson Consulting Australia has raised its unconditional cash offer for Kip McGrath to A$0.75 per share and secured unanimous board backing. The bid now carries no defeating conditions, but the final control outcome depends on acceptances before the 19 October deadline.
- Offer increased from A$0.73 to A$0.75 per share
- All takeover conditions waived at 32.37% voting power
- Kip McGrath board unanimously recommends acceptance
- Payment within 10 business days remains subject to ASIC relief
- Offer closes at 7.00pm Melbourne time on 19 October 2026
Crimson raises offer and removes bid conditions
Crimson Consulting Australia has taken the decisive step in its pursuit of Kip McGrath Education Centres (ASX:KME), lifting its all-cash takeover offer to A$0.75 per share and declaring the bid unconditional. The move removes the 90% minimum acceptance hurdle and every other remaining defeating condition, even though Crimson’s voting power stood at 32.37%, or 16,989,719 shares, on 12 October.
The revised offer values all 52.49 million Kip McGrath shares at a maximum A$39.37 million before deductions for eligible dividends. It represents premiums of 66.7% to Kip McGrath’s 29 July closing price, 59.3% to its five-day VWAP, 58.2% to its one-month VWAP and 43.9% to its three-month VWAP. The increased price applies to shareholders who have already accepted as well as those who accept from here.
Board support turns the bid into a closing race
Kip McGrath’s board has withdrawn its previous opposition and now unanimously recommends acceptance in the absence of a superior proposal. Directors who own or control shares, representing 4.31% of the register, intend to accept the revised offer. The agreement was formalised through a bid process deed containing exclusivity provisions and commitments to maintain the recommendation unless a superior proposal emerges.
The offer’s deadline had already been extended in the October closing extension to 7.00pm Melbourne time on 19 October. Crimson says Harvest Lane Asset Management has also confirmed its intention to accept, with a beneficial interest of 10,463,189 shares, or 19.93% of the register. That statement remains voluntary and does not constitute an agreement with Crimson.
Dividend treatment keeps headline price from telling the whole story
The A$0.75 headline is subject to Kip McGrath dividends that Crimson is entitled to claim as rights attached to accepted shares. Kip McGrath declared fully franked dividends totalling 6.0 cents per share, comprising a 1.0 cent ordinary dividend and 5.0 cents in special dividends, following the 6.0 cent dividend approval. A shareholder entitled to all of those dividends would receive A$0.69 from Crimson plus the 6.0 cents in dividends, producing aggregate cash receipts of A$0.75 per share before tax, while franking-credit treatment depends on individual circumstances.
Control thresholds now matter for remaining shareholders
Crimson intends to seek compulsory acquisition, board replacement and ASX delisting if it reaches 90%. Between 50.1% and 90%, it plans to take control of strategic direction and appoint a majority of its nominees to the board. Below 50%, it intends to seek board representation broadly proportionate to its voting power.
That creates a different risk for shareholders who do not accept. A large but sub-90% Crimson stake could reduce trading liquidity, leave the company under Crimson control or influence, and make a future scheme of arrangement harder because a holding above 25% can block such a transaction. Crimson says its cash reserves are sufficient to fund the maximum consideration and transaction costs. It intends to seek ASIC relief to pay consideration within 10 business days of acceptance and the variation date, but that faster timetable is not yet assured.
The remaining question is how far acceptances travel
The bid is now unconditional, but that does not determine whether Crimson ends up with majority control, compulsory acquisition rights or a minority position. The 19 October closing date is the immediate catalyst, with the scale of acceptances and any movement in Crimson’s voting power set to determine whether Kip McGrath remains a listed company with a meaningful free float or becomes controlled, and potentially delisted, by its bidder.
Bottom Line?
The price and recommendation have removed much of the bid uncertainty, but the decisive variable is whether acceptances carry Crimson through 50%, 75% or 90%.
Questions in the middle?
- Will Crimson secure more than 50% of Kip McGrath before the 19 October closing deadline?
- Will ASIC grant relief for payment within 10 business days?
- Does a rival proposal emerge despite the board’s exclusivity commitments and Crimson’s 32.37% stake?