G8 Education lodges formal takeover offer for smaller childcare rival Affinity Education

GOLD Coast childcare operator G8 Education has lobbed its formal takeover bid for smaller rival Affinity Education, telling Affinity shareholders they are unlikely to get a better offer.

Childcare operator G8 Education, the Gold Coast's largest listed company, held its annual general meeting at Southport Yacht Club today. Photo of Jenny Hutson and Chris Scott, Managing Director of G8 Education. Pic by Richard Gosling

GOLD Coast childcare operator G8 Education has lobbed its formal takeover bid for smaller rival Affinity Education, telling Affinity shareholders they are unlikely to get a better offer.

The bid is on the same terms G8 offered when it first revealed its hand early this month.

G8 is offering one share in G8 for every 4.61 Affinity shares at 70¢ a share.

The offer is at a 29.6 per cent premium to Affinity’s record low 54¢ closing price on July 2.

It is also at a 9.4 per cent premium to the 10-day volume weighted average price of Affinity, prior to the takeover bid.

G8 launched its hostile takeover tilt after Affinity’s shares fell 34 per cent on July 2, the stock savaged by investors after the company revealed a dismal profit forecast that was well below expectations.

G8 swooped in and snared a 19.89 per cent stake in its smaller rival.

Affinity’s board previously urged shareholders to take no action on the offer it labelled “highly opportunistic”.

But G8 in its bid book lodged this morning said the offer provided Affinity shareholders with exposure to an ASX-listed company with “proven management capability, greater scale and financial strength”, and an estimated $6.5 million a year in administration and head office synergies.

G8 noted it paid quarterly dividends while Affinity was yet to declare a dividend.

Australia’s largest listed operator also said it was unlikely another competing bid would emerge for Affinity, given G8 held a blocking stake of almost 20 per cent.