G8 BACKS RIVAL TAKEOVER

The move has effectively quashed any hope of a bidding war between G8 and Anchorage which has upped its price for Affinity from 90c to 92c a share.

Affinity today endorsed the revised cash-based offer and has entered into a scheme implementation deed. 

G8, Australia's largest listed childcare centre operator, says it intends to vote in favour of its rival's scheme of arrangement with Anchorage, and will not extend its takeover offer which closes September 28. 

This means G8's ambitions of acquiring the company will come to an end, and allow it to book a handsome profit on its short term investment in its fellow Gold Coast rival.  

G8 has been after Affinity since July, launching a hostile takeover bid for its struggling rival after Affinity's stock plunged around 20 per cent in one day following a soft earnings warning.

G8 originally put forward a scrip bid for Affinity worth 70c a share, before increasing this to 80c, and gave investors the option of taking cash or shares.  

Anchorage's offer is a 15 per cent premium to G8's cash offer of 80c per share.

G8 owns 19.89 per cent of shares in Affinity, which is currently worth $42.3 million at the Anchorage bid price. The company also has an interest in a further 23.45 million shares, among them some that have been acquired through its current takeover offer.

This brings its total interest in Affinity to more than $63.8 million.

G8's shares are believed to have been acquired at a considerable discount to the current offer price and the company is likely to book a handsome profit on the deal should the Anchorage buyout proceed.

Affinity has been contacted to comment, while G8 refused to comment further.