Spotless still recommending reject to shareholders
Downer Group has announced its intentions to extend its offer for unconditional takeover of the Spotless Group for a further 10 days. This extends the offer until 7pm on the 21 of July. Downer is offering $1.15 per share which was a 59 per cent premium to the share price prior to the offering.
Meanwhile Spotless has announced it’s success in winning up to $250 million in business contracts for it’s services while also recommending to it’s shareholders to reject Downers takeover offer. The multi year contract wins coming from Taronga Zoo, Myer, Port authority of NSW, & South Australia Health. They have also been successful in reducing $65 Million in debt in the second half of FY2017. $15 million better than projected.
‘While shareholders weight the benefits and risks with remaining minority shareholders of Spotless, the Board continues to hold the view that Downers opportunistic offer does not represent adequate value’ Said Gary Hounsell, Spotless chairman.
The risk that Gary Hounsell mentioned to minority shareholders is that if they do not accept the offer then the share price is likely to trade at a substantial discount to the offer price once the offer closes.