Spotless directors recommend A$2.71 a share offer from Pacific Equity Partners

Monday 30th April 2012

The board of trans-Tasman cleaning group Spotless has relented on its A$2.80-a-share demand to recommend a sale to Australia’s Pacific Equity Partners, endorsing an offer that is 9 Australian cents lower.

Pacific Equity Partners is offering Spotless shareholders A$2.71 a share in cash, which includes a partially-franked special dividend plus the fully-franked first-half dividend, the company said in a statement.

That values the company at some A$720 million. The shares last traded at A$2.46 on the ASX, valuing the company at about A$654 million. Investors who capture the full benefit of the franking will receive a total implied value of A$2.726 per share.

“Following extensive discussions with PEP, in particular over the past week, and a detailed assessment of PEP’s proposal, the Spotless board has determined that, under the present circumstances, the scheme is in the best interest of shareholders,” it said in a statement.

The board’s recommendation ends 11 months of takeover talk swirling around the cleaning services group after it knocked back a A$2.50-a-share offer in May last year, and talked up Pacific Equity’s A$2.63 bid in December.

Spotless said its key considerations were the significant disruption to the business since Pacific Equity launched its bid, the lack of an alternative offer, support for a sale by existing shareholders and the potential off of value if the uncertainty wasn’t resolved.

BusinessDesk.co.nz

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