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
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