RWC Grants Brookfield Exclusivity on A$4.75 Proposal

Reliance Worldwide (ASX:RWC) Corporation announced it has entered into a process deed with Brookfield Capital Partners LLC, together with its affiliates and their managed funds, following Brookfield's unsolicited, non-binding, indicative proposal to acquire 100% of RWC's ordinary shares by way of a scheme of arrangement at a cash offer price of A$4.75 per share. RWC said the price represents a 31.6% premium to its last closing price of A$3.61 on 17 August 2026, a 32.8% premium to its three-month volume weighted average price of A$3.58 and a 43.2% premium to its six-month volume weighted average price of A$3.32, both measured up until 17 August 2026. The proposal reflects an enterprise value for RWC of approximately A$4.1 billion and an FY26 EV/adjusted EBITDA multiple of 12.1 times on a post-AASB 16 basis, calculated on 762.6 million fully diluted shares, FY26 net debt including lease liabilities of US$351 million and FY26 adjusted EBITDA of US$242 million at an AUD/USD rate of 0.7114, or 12.9 times on a pre-AASB 16 basis, struck on net debt excluding lease liabilities of US$243 million and adjusted EBITDA of US$219 million including rent expense of approximately US$23 million. The proposal followed earlier unsolicited, non-binding, indicative offers from Brookfield in April and May 2026 at A$4.15, A$4.25 and A$4.50 cash per share, after which RWC provided non-public information for an approximately eight-week due diligence process and Brookfield submitted the revised A$4.75 offer in early August. RWC noted the offer price would be reduced by the cash amount of any dividends paid or payable after the date of the proposal, and that no dividend will be paid in relation to the second half of FY26.

Under the process deed, RWC has agreed to exclusivity restrictions including non-solicit, no talk with no fiduciary exception, and no due diligence obligations, for four weeks from 17 August 2026 to 15 September 2026, during which RWC and Brookfield have agreed to work together in good faith towards a scheme implementation deed on terms consistent with the proposal. Brookfield has agreed that any scheme implementation deed will include a go-shop provision under which RWC may solicit third party interest for 30 days from signing, with Brookfield holding a five business day matching right and RWC paying a break fee if it terminates to pursue a go-shop proposal. RWC would reimburse Brookfield's out-of-pocket costs up to US$5 million in specified circumstances. The proposal and entry into any binding scheme implementation deed remain subject to conditions including satisfactory completion of confirmatory due diligence, entry into a deed on terms acceptable to both parties, approval by Brookfield's investment committee, and the unanimous support of RWC's directors. RWC said there is no certainty the proposal will lead to a definitive transaction or binding offer and recommended that shareholders take no action at this time. Goldman Sachs and Oaktower Partnership are acting as financial advisers and Herbert Smith Freehills Kramer as legal adviser.