The Brief:
Brookfield has signed a deal to buy Reliance Worldwide for US$3.38 a share, valuing the business at A$4.1bn, after four rounds of bidding.
HSF Kramer acts for Reliance, Allens reps Brookfield, and a go-shop runs until 16 October.
Third time wasn’t the charm. Fourth was.
Brookfield has signed a scheme implementation deed to buy Reliance Worldwide, the ASX-listed plumbing products group, in a deal worth more than A$4.1bn. Three knockbacks and three months of due diligence later, Reliance’s board has finally said yes, on the condition it’s still allowed to shop around.
Brookfield first came knocking in April with an unsolicited A$4.15 a share proposal. Reliance said not yet. May brought A$4.25, then A$4.50. Still no deal.
Reliance let Brookfield into the data room for an eight-week due diligence run, and by early August the price had climbed to A$4.75. A Process Deed followed on 18 August, handing Brookfield four weeks of exclusivity.
The SID finally landed on 16 September, three months after it all started.
The deal
Brookfield will acquire 100% of Reliance for US$3.38 cash a share, now priced in US dollars to match Reliance’s own reporting currency. At the AUD/USD rate on 15 September, that’s A$4.75. Shareholders can choose to be paid in US or Australian dollars.
The price puts an enterprise value of roughly US$2.9bn (A$4.1bn) on Reliance, a 31.5% premium to the undisturbed last close and as much as 43.0% on the 6-month VWAP.
But the board hasn’t shut the door. A go-shop runs until 16 October, giving Reliance and its advisers a clear run to test the market for a better offer. Brookfield still gets a 5 business day matching right if a rival shows up. Break fees run both ways: US$25.3m from Reliance to Brookfield, and the same amount back to Reliance if Brookfield walks.
Funding’s locked in too. Brookfield Capital Partners VII L.P. has committed up to US$1.5bn in equity, with lenders good for up to US$1.65bn in debt.
The deal still needs FIRB, ACCC, US, German and Ukrainian competition clearances, plus a tick from Grant Thornton as independent expert and the usual shareholder and court sign-off. The scheme booklet is due out in November, with implementation pencilled in for Q1 2027.
Reliance now joins a growing list of ASX names heading for private hands, alongside Monash IVF, oOh! Media and Steadfast.
Who’s acting
HSF Kramer advises Reliance, with lawyers across Melbourne, Sydney and New York led by Rodd Levy, Michael Ziegelaar and Kam Jamshidi. Meanwhile, Allens advises Brookfield, led by Tom Story.
Brookfield private equity boss Anuj Ranjan said: “Reliance is the type of business we look for: a global, market-leading industrial company with strong brands, durable customer relationships and clear opportunities to create value through investment in operations and continued product expansion.”
For now, the ball’s in Reliance’s court. It has until 16 October to see if anyone else wants to play.