Spotless says Downer EDI takeover bid has ‘defects’
Spotless has sought to fend off a $1.26 billion hostile takeover bid from engineering-services company Downer EDI.
Spotless Group Holdings has sought to fend off a $1.26 billion hostile takeover bid from engineering-services company Downer EDI, citing “material defects and misleading and deceptive statements” in the bidder’s statement.
The Takeovers Panel late yesterday said it had received an application from Spotless regarding the off-market takeover bid from Downer, but had not yet decided whether to conduct proceedings in relation to the matter.
Downer EDI’s board and managing director Grant Fenn are under pressure to justify the Spotless purchase to investors after almost $1bn was wiped from Downer’s market capitalisation because of a troubled capital-raising.
The Spotless takeover bid remains on track, though, because the entitlement offer and institutional bookbuild last week was underwritten by investment bank UBS.
Shares in Downer have fallen 22 per cent to $5.79 since the takeover and related capital raising were announced, while Spotless shares have risen 50 per cent to $1.085. Yesterday’s announcement from the Takeovers Panel came after the close of trading.
In its submission, Spotless said the bidder’s statement “contains a number of material defects and misleading and deceptive statements, including in respect of the offer price premium, Downer’s post-acquisition intentions, certain terms of the offer, Downer’s funding arrangements and the conditions of the offer”.
The catering and cleaning contractor sought interim orders restraining the dispatch of Downer Services’ bidder’s statement, and any supplementary bidder’s statement, pending resolution of the application and requiring Downer to produce relevant board papers to the panel.