Avast NortonLifeLock Merger(TBC)

Only 3 working days left for an announcement on the plans for the proposed merger.

Any thoughts if this will go ahead, and if so on what terms?

https://www.londonstockexchange.com/stock/AVST/avast-plc/company-page

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One more sleep and we get to find out what’s happening.

Am I the only one who holds this stock?

https://www.londonstockexchange.com/news-article/market-news/recommended-merger-of-avast-with-nortonlifelock/15093614

Big :raised_hands:

Further to the announcements made by NortonLifeLock Inc. (“NortonLifeLock”) and Avast plc (“Avast” or the “Company”) on 14 July 2021, the boards of NortonLifeLock and Avast are pleased to announce that they have reached agreement on the terms of a recommended merger of Avast with NortonLifeLock, in the form of a recommended offer by Nitro Bidco Limited (“Bidco”), a wholly-owned subsidiary of NortonLifeLock, for the entire issued and to be issued ordinary share capital of the Company (the “Merger”). It is intended that the Merger will be effected by means of a Court-sanctioned scheme of arrangement under Part 26 of the Companies Act (the “Scheme”).

· The boards of NortonLifeLock and Avast believe the Merger has compelling strategic logic and represents an attractive opportunity to create a new, industry leading consumer Cyber Safety business, leveraging the established brands, technical expertise and innovation of both groups to deliver substantial benefits to consumers, shareholders and other stakeholders.

· Under the terms of the Merger, Avast Shareholders will be entitled to receive:

for each Avast Share held: USD 7.61 in cash

and

0.0302 of a New NortonLifeLock Share

in respect of their entire holding of Avast Shares (the “Majority Cash Option”). Based on NortonLifeLock’s closing share price of USD 27.20 on 13 July 2021 (being the last Business Day on which NortonLifeLock Shares traded on NASDAQ before the commencement of the Offer Period in relation to the Merger) and the Announcement Exchange Rate, the Majority Cash Option values each Avast Share at 608.4 pence per share (USD 8.43 per share).

· The Majority Cash Option comprises approximately 90% by value in cash and approximately 10% by value in New NortonLifeLock Shares.

· The Majority Cash Option represents a premium of approximately:

· 20.7% to the Closing Price of 504.2 pence per Avast Share on 14 July 2021, being the last Business Day on which Avast Shares traded on the London Stock Exchange prior to the commencement of the Offer Period in relation to the Merger (the “Unaffected Date”); and

· 28.0% to the volume weighted average price of 475.1 pence per Avast Share for the three months up to the Unaffected Date.

· As an alternative to the Majority Cash Option, Bidco will make available to Avast Shareholders the option to elect for a different mix of cash and share consideration, pursuant to which Avast Shareholders (other than those resident in a Restricted Jurisdiction) may elect to receive:

for each Avast Share held: 0.1937 of a New NortonLifeLock Share
>and
>USD 2.37 in cash

in respect of their entire holding of Avast Shares (the “Majority Stock Option”). Based on NortonLifeLock’s closing share price of USD 27.20 on 13 July 2021 (being the last Business Day on which NortonLifeLock Shares traded on NASDAQ before the commencement of the Offer Period in relation to the Merger) and the Announcement Exchange Rate, the Majority Stock Option values each Avast Share at 551.1 pence per share (USD 7.64 per share).

· The Majority Stock Option comprises approximately 31% by value in cash and approximately 69% by value in New NortonLifeLock Shares. The Majority Stock Option enables Avast Shareholders to participate more fully in the upside and long-term value creation opportunity resulting from the Merger.

All in all shareholders (I think) should be happy with both options as I read the end outcome is the same. Ignore the higher premium on the second as on this one the company is paying out less cash proceeds with this option.

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Just to add, yesterday’s closing price was $24.15 for Norton.

Majority cash option =$7.61 + $0.73(0.0302*24.25) = $8.34 per share

Majority share option = $2.37 + $4.68(0.1937 x 24.15) = $7.04

That’s if my :brain: is working properly this early.

The second option is a moving target, but if possible majority cash option please @Team212 :crossed_fingers: - once the vote has gone through to proceed with merger :upside_down_face:

I saw the news about the merger the other day, so as a research exercise, I purchased 10 shares of AVST.L just to see how the merger plays out.

Should be interesting to see which way it goes with the benefits to Avast shareholders.

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Yeah as I read its not 100% agreed yet, but the best option appears to be to accept the cash, and then buy back Norton shares if that’s what you want.

I guess the difficulty here, is (at least I think), is that all 212 customers will need to be treated the same, but at least one appears to be much favourable than the other.

Norton shares are now $26.29

Majority cash option - $7.61 cash plus 0.0302 x $26.29 so $8.4 a share.
Majority stock option - $2.37 in cash plus 0.1937 x $26.29 so $7.46 a share.

There will be a cross over point, if the Norton SP rises at the time of election. Given the cash difference of $5.24 a share, and a share difference of 0.1635, then if the Norton share price crosses over $32.05, you want the majority stock option, but you would probably want to be comfortably over that point.

Majority cash option - $7.61 cash plus 0.0302 x $32.05 so $8.58 a share.
Majority stock option - $2.37 in cash plus 0.1937 x $32.05 so $8.58 a share.

The Norton SP hasn’t been that high since 2017.

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Good to see the writers on Fool paying attention to the merger!

A lot of filler articles without proper review.