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Adviser backs GeoOp merger benefits

NZ NewswireNZ Newswire 14/04/2016 Paul McBeth

The pros of GeoOp's planned merger with Australian mobile sales app developer InterfaceIT "significantly outweigh" the cons of the deal, an independent adviser hired to assess the deal.

Auckland-based GeoOp, which develops a workforce management app, is asking shareholders to approve a deal where it will buy InterfaceIT for $9 million.

The deal would see the Australian company's owners hold about 32 per cent of the merged entity, rising to as much as 64 per cent if certain conditions are met in what Simmons Corporate Finance called a worst-case scenario for the GeoOp shareholders in its report on the deal.

The independent adviser valued InterfaceIT at between $6.1m-$8.5m and added an additional $2.3m-$4m of benefits arising from a merger.

"We are of the view that the GeoOp shareholders' main focus should be on whether there is any dilutionary impact on the value of their respective shareholdings rather than on their level of voting rights," the report said.

"We are of the view that the IIT Acquisition is fair to the GeoOp Shareholders from a financial point of view and therefore does not dilute the value of their respective shareholdings."

GeoOp is holding a special meeting on May 5 in Auckland where shareholders will vote on proposals to approve the deal, including the appointment of InterfaceIT's Roger Sharp as chairman.

The NZAX-listed shares last traded at 30 cents, and have dropped 25 per cent this year.

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