TPG tipped to throw Greencross a billion-dollar bone

TPG tipped to throw Greencross a billion-dollar bone

Greencross (ASX: GXL) has gone into a trading halt as rumours abound that the company is the target of a takeover by US private equity firm TPG Capital.

It is reported that TPG is set to spearhead an estimated $1 billion buyout of the veterinary empire.

Today at the Greencross AGM, while TPG wasn't mentioned by name, executive director and chairman Stuart James confirmed that the company has received and is assessing the credibility of several proposals.

"The proposals are subject to a number of conditions and are expressed as being non-binding and incomplete," says James.

"The proposals are required to be kept confidential, and there is no certainty that any proposal will result in a transaction involving Greencross, what the terms of any such offer would be, or whether there will be a recommendation by the board of Greencross."

TPG is likely the frontrunning potential buyer considering its previous attempts to acquire the company.

In 2016, Greencross snubbed a $770 million takeover bid which was mooted by TPG together with alternative asset manager The Carlyle Group.

At the time, former CEO Martin Nicholas criticised that proposal as "opportunistic" and one which "fundamentally undervalued Greencross".

The company then went on to deliver an 18 per cent increased revenue of $326.7 million at the end of FY16.

It has been reported by The Australian that the new price tag of around $1 billion is comprised of an expected 30 per cent premium Greencross' $546 million market value and factors in a further $268 million of debt.

In its most recent trading up date, Greencross posted a 7.6 per cent group revenue growth and a 5.4 per cent growth in group same-store sales.

Greencross says that its trading halt will continue, possibly until November 6, pending an official announcement.

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