Downer launches A$1.26b Spotless takeover
Infrastructure and mining services company Downer EDI has lodged an A$1.26 billion (NZ$1.38b) takeover offer for cleaning and catering company Spotless Group.
Downer has taken a nearly 20 per cent stake in Spotless and offered to buy all remaining Spotless shares at A$1.15 each, a 59 per cent premium to value of the shares at the close of trade on Monday.
"The acquisition of Spotless is a significant investment in Downer's strategy to expand its capabilities and strengthen its position as a leading provider of services to customers in Australia and New Zealand," Downer chief executive Grant Fenn said in a statement.
Downer said the acquisition would create the largest diversified and integrated services manager in Australia and New Zealand.
Spotless shares hit an all-time low of 79.5 cents in February after the troubled company signalled a reduction in dividends following a $358 million half year loss that included heavy writedowns.
Downer said its offer represented an opportunity for Spotless shareholders to realise certain value for their shares.
The takeover will be funded through a $1.01 billion rights share issue by Downer, and debt.
Shares in Downer and Spotless are in a trading halt.