G8 MAY FACE BIDDING WAR FOR AFFINITY
Written on the 4 August 2015 by Nick Nichols
A BIDDING war could erupt for control of Affinity Education (ASX:AFJ) after the Gold Coast childcare centre operator revealed it had been approached by a new suitor.
The announcement by Affinity comes on the heels of G8 Education (ASX:GEM) sweetening its takeover offer to $185 million, or 80c a share, this week in a bid to wrap up the remaining 80 per cent of the company it doesn't already own.
Affinity has urged its shareholders to take no action on the G8 offer.
"The directors of Affinity have had discussions with another interested party since the announcement by G8 on July 3 of its intention to make a takeover offer," says the company in an announcement to the ASX today.
"While there can be no assurance that a rival proposal will eventuate, it is in your interests to wait until the release of the target's statement, at which time the directors of Affinity will advise in relation to these discussions and provide their recommendations," it says.
G8 is offering one of its shares for 4.25 Affinity shares in its all-scrip bid for the childcare minnow. The offer, which closes on September 28, has been increased from 4.61 shares in a replacement bidder's statement released by G8 this week.
G8 also has armed itself with more than $205 million in additional funding as it waits on shareholder reception to its takeover offer, which will see Affinity shareholders either swap their stock for G8 shares or cash in at 80c a share.
To supplement its cash reserves and shore up its war chest for acquisitions, G8 has raised $155 million through the issue of unlisted, unsecured notes.
It also has secured an extra $50 million in bank debt to pay out bank debts owed by Affinity.
Author: Nick Nichols