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Spotless raises offer for Taylors, wins support of independents

Friday 18th September 2009

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Spotless Group, the Australian laundry, hospitality and cleaning contractor, raised its offer to mop up the shares in Taylors Group that it doesn’t already own, winning the support of the target’s independent directors.

Spotless Services, a subsidiary of ASX-listed Spotless Group, increased its offer to $2.25 a share, from $2.08, valuing Taylors at $54.7 million. The offer amounts to a 12.5% premium on Taylors price before the initial offer was made on August 25.

Shareholders in Taylors will also be entitled to a fully-imputed dividend of 7 cents a share. Spotless already owns 66% of Taylors, whose shares have surged 32% in the past three months.

“There is most unlikely to be another offer, and if the current bid does not succeed, it could be a long time before the share price returns to the level being offered,” said Taylors chairman Trevor Kerr, one of the two independent directors along with former Cabinet minister Paul East. “Taylors is a mature company, with limited growth potential.”

Shares of Taylors, which operates commercial laundry services, rose 3.8% to $2.20 on the NZX today. Spotless last traded at A$2.64 on the ASX and has climbed 18% in the past three months.

The target company statement, an independent adviser's report from Grant Samuel & Associates and a letter from the independent directors is being mailed to shareholders next week.Director East said he will accept the revised offer for his own shares. Kerr doesn’t own the stock.

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