Navitas rejects BGH-led bid, hits out at AustralianSuper and Rod Jones over pledge to rebuff higher bids

Navitas has rejected a BGH-led $2bn bid as it hit out at an arrangement it said could potentially impede higher offers.

Former Navitas CEO Rod Jones. Picture: Colin Murty

Navitas has rejected a private equity-backed takeover offer valuing it at almost $2 billion and said it was discussing the possibility of an alternative deal with unnamed parties.

The company also hit out at the BGH-AustralianSuper consortium behind the bid, saying its arrangement was blocking the company’s shareholders from receiving a superior proposal.

Rejecting a request for due diligence to pursue a $5.50 a share offer, Navitas (NVT) said the offer price was “significantly below” the board’s assessment of fair value and not in shareholders interests to take any further.

The company criticised an agreement binding AustralianSuper — the country’s biggest superannuation fund — and Navitas founder Rod Jones — to vote against any competing proposal, even if it offered a superior return to shareholders.

“The Navitas Board is not inclined to provide due diligence to any party who places restrictions on Navitas shareholders from supporting a superior alternative proposal,” Navitas said in a statement to the ASX.

Navitas said it had been exploring alternative bids with “a number of parties” to see if they could offer superior value.

“A number of these parties have confirmed the Board’s view that the commitment by AustralianSuper and Mr Jones are potentially an impediment to proceeding with any competing proposal.”

AustralianSuper has 5.4 per cent of Navitas’ issued capital, while Mr Jones has 12.4 per cent, giving the pair the ability to block a bid for outright ownership of the company.

It is the second rejection for the BGH-AustralianSuper team, with Healthscope (HSO) this morning rejecting a request for due diligence in support of a $2.36 a share takeover bid. The consortium has support from 10 per cent shareholder Ellerston Capital.

Healthscope has granted due diligence to a rival takeover from Brookfield Capital Partners, a unit of the giant Canadian asset manager, that is offering $2.435 a share for control and $2.585 for outright ownership.

The bid aims to test AustralianSuper’s resolve to stick with BGH by offering a higher price and an option to retain a direct interest in Healthscope alongside the bidders, which had been a key driver for the BGH bid.

BGH, led by former TPG Australia head Ben Gray, former Macquarie banker Robin Bishop and former TPG executive Simon Harle closed a $2.3bn capital raising for their first private equity fund in February. The fund includes a $200 million commitment from AustralianSuper, which also wants to invest directly in assets and companies, as it did with the NSW Ports privatisations in 2013 alongside IFM Investors.

The company’s shares have fallen sharply from highs above $5.50 in late 2017, and despite a bounce in the wake of the takeover approach, are 4.9 per cent lower in 2018.

With Dow Jones