SPOTLESS REJECTS DOWNER'S 'HOSTILE' $1.2B BID AS IT PROMISES A STRATEGY RESET

SPOTLESS REJECTS DOWNER'S 'HOSTILE' $1.2B BID AS IT PROMISES A STRATEGY RESET
CLEANING and catering services company Spotless has rejected a $1.26 billion takeover bid from mining services firm Downer EDI, describing it as "hostile" and "highly conditional".

Spotless issued a statement to the ASX on Monday saying the $1.15 per share offer does not represent adequate value as it fails to reflect the company's "strong core" business and the management and board have a clear plan to deliver earnings growth and value to shareholders.

Spotless chairman Gerry Hounsell says the takeover offer is not in the best interests of shareholders and urged them to reject the offer.

"The Spotless board is unwavering in its belief in the fundamental strengths of the business," Hounsell says.

"These include a blue-chip customer base and a strong portfolio of long term government, health, defence and PPP (public private partnership) contracts.

"We have assessed the Downer offer in the context of our announced strategy reset which is expected to be a material driver of growth and is already delivering results including increasing win rates and a substantially increased pipeline of quality opportunities."

Since Downer launched its takeover bid in March, Spotless also says it has been in detailed discussions with other companies including a global services company for a potential merger which would provide better value to shareholders than the Downer offer.

Those discussions ended on April 22, but Spotless is still urging investors to back its existing turn-around strategy.

"If we remain an independent listed entity, the directors are confident the fundamental strengths of Spotless' core business, together with management's execution of the strategy reset will deliver greater value to Spotless' shareholders than the Downer offer in the medium term," Hounsell says.

Spotless shares lost nearly one per cent by around 3.30pm AEST to $1.10. Downer EDI shares were down half a percent to $5.60.

Business News Australia

Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support

Crypto staking: a new way to earn passive income
Partner Content
You may be familiar with traditional ways of earning passive income such as trading sto...
Etoro
Advertisement

Related Stories

Shares in edtech OpenLearning rise on appointment of M&A advisor IBIS Capital

Shares in edtech OpenLearning rise on appointment of M&A advisor IBIS Capital

Shares in education software as a service (SaaS) business OpenLearn...

AI voice tech Curious Thing closes $7 million pre-series A funding round

AI voice tech Curious Thing closes $7 million pre-series A funding round

Sydney-based artificial intelligence (AI) voice-tech platform ...

Underwear brand Step One dacked after downgrading sales growth and earnings forecasts

Underwear brand Step One dacked after downgrading sales growth and earnings forecasts

Shares in Australian underwear brand Step One (ASX: STP) have crash...

Brambles confirms takeover talks with CVC Capital Partners

Brambles confirms takeover talks with CVC Capital Partners

In a short statement posted to the ASX this morning, Australian log...