Spotless won't endorse sale under A$2.80 a share

Wednesday 11th January 2012

Spotless Group says it won’t endorse a sale to private equity firm Pacific Equity Partners for less than a 17 percent premium to where the shares are currently trading.

The dual-listed cleaning and laundry services company’s board won’t let PEP conduct due diligence and recommend a sale without certain terms, one being a minimum bid of A$2.80 a share, made up of the cash price and next dividend paid. That values the company at A$742.8 million, up from the A$711 million the private equity firm offered in December.

“In any control transaction, the duty of the board is to ensure that he medium and long-term prospects of the company are reflected in the value realised for the benefit of all shareholders,” Spotless chairman Peter Smedley said in a statement to the ASX. “The clear communication of the terms required for due diligence and unanimous board recommendation have provided certainty to PEP and all shareholders of the board’s position.”

PEP yesterday said it won’t revise its proposal without access to due diligence, saying the A$2.68-a-share offer is a 41 percent premium to the three-month weighted average price on Nov. 2. The private equity firm sweetened its bid in December, initially offering A$2.63 a share.

In May last year, Spotless said it turned down a bid from an unnamed private equity firm of A$2.50-a-share, saying the board didn’t believe that reflected the “fundamental value of the company in the context of control.”

The shares rose 1.7 percent to A$2.39 in trading today, valuing it at A$634 million.

(BusinessDesk)

BusinessDesk.co.nz

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