Pacific Equity Partners agreed to buy cleaning and catering contractor Spotless Group after raising its bid a second time to A$720 million or $753 million.
Stockholders will receive A$2.62 a share in cash plus a special dividend of 4 Australian cents, and get to keep a 5 cent interim dividend, according to Spotless.
Pacific Equity’s A$2.71-a-share offer is three cents more than its most recent bid and gained unanimous support from the Spotless board. The agreement ends a five-month battle for the Melbourne- based contractor, which faced a shareholder revolt after refusing to negotiate on a bid unless the offer was raised to at least A$2.80.
Spotless entered talks with Pacific Equity and opened up the company’s books in February after investors including Allan Gray Ltd. considered ousting the board. “We think the board has done the right thing and followed the wishes of its shareholders,” Simon Mawhinney, a fund manager and Spotless shareholder at Allan Gray in Sydney, said today by telephone. “We always felt it was a reasonable price and the board has extracted an extra 3 cents a share.”
The takeover is subject to approval by investors and regulators. Buying Spotless, which expanded from one dry-cleaning store in 1946, gives the private-equity firm access to a business that offers corporate services including facilities management, food and cleaning services, in more than 30 countries.
The bid provides “certainty of cash at a compelling price,” Rob Koczkar, a partner at Pacific Equity, said in a separate statement. Shareholders including Allan Gray, formerly Orbis Group, Investors Mutual Ltd. and Lazard Asset Management LLC agreed in November to support Pacific Equity’s original bid of A$2.63 a share.
The board didn’t receive a proposal from any other party since November, it said. The uncertainty went back to May 2011, when the company rejected an approach of A$2.50 a share from another buyout firm, Blackstone Group LP, Spotless Chairman Peter Smedley said.
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