G8'S CHAIR QUITS AFTER FAILED TAKEOVER BID
Written on the 24 September 2015 by Jenna Rathbone
G8 Education (ASX:GEM) chairperson Jenny Hutson has fallen on her sword after the failed takeover bid for childcare rival Affinity Education (ASX:AFJ).
Hutson, who was appointed to the board in 2010, today announced she is resigning from the G8 board to 'pursue other opportunities'.
However, it is widely understood that she has been forced to take responsibility for failing to secure Affinity which would have added 161 childcare centres to G8's portfolio.
Her resignation comes just days after G8's ambitions of acquiring Affinity abruptly came to an end when private equity group Anchorage Capital Partners confirmed it had secured funds to proceed with its $212 million takeover.
Hutson led the hostile takeover bid for Affinity, originally putting forward a scrip bid worth 70c a share, before increasing this to 80c, and gave investors the option of taking cash or shares.
G8, Australia's largest listed childcare centre operator, gave up on a bidding war for the smaller competitor after private equity firm Anchorage Capital Partners upped its price for Affinity from 90c to 92c.
Hutson says it has been a 'privilege and pleasure' to lead the board for the past five years.
"G8 Education has declared and paid quarterly dividends since 2010 and has had 10 consecutive periods of relative outperformance as compared with prior periods," says Hutson.
"Having led the proposed acquisition of Affinity Education it is time for me to step aside and for there to be a renewal at board level."
Non-executive director Matthew Reynolds will take on the role of acting chairman while a permanent replacement is sought.
Reynolds paid tribute to Hutson's service to the company. He highlighted that G8 has become highly acquisitive over the past five years since Hutson's appointment.
G8 has grown to own 457 centres, with 203 of them added in 2014, and G8's latest profit result reflected this significant run of acquisitions which helped revenue jump 66 per cent to $310.9 million for the six months to June 30.
"Ms Hutson has made a very significant contribution to G8 Education during its transformation from a small listed company to a significant operator in the childcare and education sector," says Reynolds.
"I am very confident that the board transition will be a positive on and the performance of G8 Education will continue to be exceptional."
G8's shares slipped about 3 per cent to $3 following the news this morning with more than two million shares changing hands.
Author: Jenna Rathbone
About: Jenna Rathbone is a Queensland-based journalist who writes on a range of issues including business and property affairs and social issues.Connect via: Twitter