Spotless Rejects PEP's $698m Bid

Submitted by Share Trading on 17 November, 2011 - 19:48

After speculations about a takeover, the Australian industrial services firm Spotless Group (SPT) confirmed that the buyout firm Pacific Equity Partners offered a $698 million takeover proposal but said its directors felt that the offer was too low.

According to Spotless, "The Spotless directors have reviewed the proposal in detail and believe that it does not reflect the fundamental value of the company in the context of a change of control." PEP proposed a price of $2.63 a share, valuing the cleaning, catering and maintenance services provider at $698.15 million.

The private equity firm told Spotless that it has entered pre-bid agreements with some of the Sportless shareholders, giving them the right to acquire 19 per cent of Spotless if the company decides to accept the offer. Spotless also rejected a $657 million bid from the US buyout giant Blackstone Group 6 months prior the latest bid.

The shares of Spotless were last traded at a price of $2.35, valuing the company at $623.8 million. The trading of its shares will resume at 1100AEDT.