US billionaire wants local backing for ABC bid

A COMPANY headed by an American billionaire once jailed for white-collar crimes says it would only bid for the failed ABC Learning childcare group with an Australian partner.

A COMPANY headed by an American billionaire once jailed for white-collar crimes says it would only bid for the failed ABC Learning childcare group with an Australian partner.

Michael Milken is the co-founder and chairman of Singapore-based company Knowledge Universe, which confirmed yesterday it had been looking at lodging a bid to buy ABC's 715 centres.

The company's chief executive, Peter Maslen, said it had not yet decided whether to lodge a formal offer for Australia's biggest childcare chain. "I feel strongly about the need for a high-quality, stable and professionally-operated early childhood education sector in Australia," Mr Maslen said.

"If the company were to make a future offer, it would do so only with an Australian partner and with the constructive support and encouragement of the Australian government, unions and the employee base."

The Australian revealed on Wednesday that Knowledge Universe is vying against a consortium of charities as the potential new owners of ABC Learning, which collapsed into receivership beneath $1.6 billion of debts last November.

The charities -- Mission Australia, the Brotherhood of St Laurence, the Benevolent Society and Social Ventures Australia -- have refused to explain publicly how they would fund any takeover, or operate the centres.

Knowledge Universe operates more than 2000 early childhood centres worldwide, and has already snapped up ABC Learning's British offshoot, Busy Bees. Its other childcare brands include KinderCare, Odyssey, Knowledge Beginnings, Pat's Schoolhouse and Cambridge Learning Centre, marketed as "the private school for little people".

Its founder, Mr Milken, a leading American junk bond trader and philanthropist, was charged with 98 counts of racketeering and insider trading in 1989. He served a year and 10 months in jail -- as well as paying a $US200 million fine -- after pleading guilty to five minor charges.

ABC Learning's receiver, McGrathNicol, is hoping to sell the group by Christmas.

The sale of 15 per cent of Australia's childcare market coincides with massive and costly reforms to be negotiated at a Council of Australian Governments meeting in December.

Childcare Minister Kate Ellis yesterday backed tougher quality standards in childcare centres.