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Spotless offer for Taylors at low-end of valuation range

Monday 21st September 2009

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Spotless Group’s offer to mop up the remaining shares of Taylors Group is at the low end of a valuation range by Grant Samuel & Associates but still won the endorsement of independent directors, who say a counter-bid is unlikely.

Taylors, the commercial laundry company, is valued at between $2.22 and $2.58 a share including a premium for control, according to Grant Samuel. Spotless, which already owns 66% of Taylors, raised its offer from an initial $2.08 a share after talks with independent directors Trevor Kerr, chairman, and Paul East.

Kerr said while the valuation show’s the Spotless offer is near the bottom of the assessed range, there is “almost no chance of another party bidding for the shares,” the price is 12.5% above the stock’s recent trading range and if the takeover fails, the shares are likely to fall and stay low for some time.

Shareholders in Taylors will also be entitled to a fully-imputed dividend of 7 cents a share. Taylors last traded at $2.24, having climbed 24% in the past month. Independent director East has indicated he will sell his shares into the offer, Kerr said.

Spotless last traded at A$2.73 on the ASX and has climbed 22% in the past three months.

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