Ship management company Taylor Maritime Investments (TMI) and its subsidiary Good Falkirk have entered into a transaction implementation agreement with JSE-listed maritime transportation services company Grindrod Shipping for a voluntary conditional cash offer for all of the issued ordinary shares in Grindrod Shipping.

Grindrod Shipping shareholders will be entitled to receive the offer price of $21 in cash for each share tendered in the offer.

Further, subject to the conditions to the offer being satisfied as of the expiration time of the offer, Grindrod Shipping has agreed to declare and pay a special dividend of $5 a share to Grindrod Shipping shareholders on a dividend record date to be established by the board. If the conditions are not satisfied, no special dividend will be paid.

If the conditions are satisfied, shareholders will receive an aggregate transaction value of $26 a share, from the offer price and the special dividend.

This values the company’s existing issued and to be issued ordinary share capital at about $506-million.

The $26-a-share price represents a 26.8% premium to the last traded price per share on August 26 and represents a 14.7% premium on 90-day volume weighted average prices, and a 19.4% premium on 180-day volume weighted average prices.

"The offer in cash provides an immediate and certain exit opportunity for Grindrod Shipping shareholders at an attractive premium to the company’s undisturbed share price at a time of significant market volatility and economic uncertainty," Grindrod Shipping said on October 12.

Additionally, Grindrod Investments holds about 10.12% of the outstanding shares, and has entered into a tender and support agreement pursuant to which, and subject to the terms and conditions set forth therein, it has agreed to tender its shares into the TMI offer.

Further, the offer is conditional on TMI having received at least such a number of offer shares carrying more than 50% of the voting rights by the time of its expiration. The tender offer has not yet commenced, Grindrod Shipping said in a statement.