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In extending its deadline for its $1.15 per share offer, Downer EDI has also indicated it is willing to accept less than full ownership of Spotless as it reduces its minimum acceptance from 90 to 50 per cent. At $1.15, it values Spotless at $1.3 billion.
The board of Spotless has called on shareholders to "trust their judgment" and reject the hostile takeover bid as it "does not represent adequate value of Spotless".
"Downer is clearly seeking to stimulate some momentum for their offer but, as we have maintained from the start, this offer does not reflect adequate value," says Spotless chairman Garry Hounsell.
"Shareholders have a clear choice accept Downer's offer, or back the board's considered judgment that there will be greater value in the medium term by remaining a Spotless shareholder.
"The Spotless directors were appointed by shareholders to exercise their best judgment to act in the best interests of all shareholders and maximise shareholder value."
Downer EDI says it will waive outstanding defeating conditions if it reaches 50 per cent of Spotless shares by June 16.
Downer EDI currently holds 23.8 per cent, and its chief executive Grant Fenn says the company will maintain its $1.15 per share offer, representing a 59 per cent premium to Spotless' share price when the bid was launched in March.
"The alternative for Spotless shareholders is to put their faith in a company which saw a share price decline of almost 70 per cent in the two years prior to the announcement date and which has acknowledged the risks around the execution of its strategy reset," says Fenn.
Spotless is currently trading at $1.14, down 0.26 per cent.
Downer EDI is currently trading at $6.54, up 1.47 per cent.
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