DOWNER EDI GRABS MORE THAN 50 PER CENT STAKE IN HOSTILE TAKEOVER TARGET SPOTLESS
Written on the 27 June 2017 by David Simmons
DOWNER EDI Limited (ASX: DOW) now holds more than 50 per cent of Spotless Group Holdings Limited's (ASX: SPO) shares, edging it closer to completing its hostile takeover of the cleaning company.
As of this morning, engineering group Downer owns 50.3 per cent of Spotless shares, meaning Downer is now the majority shareholder.
In an ASX statement issued by the Spotless board of directors, Downer is currently seeking representation on the Spotless board now it has the controlling interest in the company.
Downer has encouraged the remaining Spotless shareholders to accept their offer to buy shares at a premium of $1.15 per share without delay.
As Downer is the majority shareholder in Spotless their offer period has been extended from the original closing date of 29 June 29 to the new date of 11 July and may be extended again.
Downer says it will not increase its $1.15 per share offer because there are no superior rival proposals.
Over the last two months Downer has been increasingly ramping up its hostile takeover of the facilities management company.
Downer has encouraged Spotless shareholders to accept the deal, referring to the apparent "mismanagement" of Spotless under the current board of directors.
Spotless' board has been adamant that shareholders should trust the board and hold onto their shares.
Spotless Chairman Garry Hounsell says the company is engaging with Downer regarding the composition of the board but still believes Downer's offer is inadequate.
"The Board continues to believe that the Downer offer does not represent adequate value, but will engage with Downer in the best interests of the company and all shareholders," says Hounsell.
Following Downer's announcement Spotless shares are trading down 0.43 per cent to $1.15.
Business News Australia
Author: David Simmons