SPOTLESS FINALLY CAVES IN TO DOWNER'S HOSTILE TAKEOVER
Written on the 18 July 2017 by David Simmons
DOWNER EDI Limited's (ASX: DOW) hostile takeover of cleaning services Spotless Group may soon be coming to an end after the Spotless board made recommendations to shareholders to accept Downer's offer.
The Spotless Board has now recommended to shareholders that they accept Downer's offer who now own 67.3 per cent of the issued share capital in Spotless.
Downer notified the ASX that it passed the 67 per cent mark on Monday, after launching its hostile takeover bid in March.
"We continue to believe in the strong underlying fundamentals of the Spotless business, however now that Downer owns 67.279 per cent of Spotless and will control a majority of the Board from Wednesday, on balance, we reluctantly recommend that shareholders accept the Downer Offer," Spotless chairman Garry Hounsell says in a statement to the ASX.
Spotless has, until now, been resolute in the face of Downer's $1.2 billion hostile takeover, recommending at each step to hold onto shares and to trust board to resurrect the struggling Melbourne company.
As the controlling shareholder, Downer has extended the offer period for those wishing to sell their shares at the $1.15 premium to 7pm on Monday 31 July.
Downer has also taken control of the Spotless board, by announcing that its four nominee directors have been appointed to the board.
The Downer nominees are Philip Garling and Grant Throrne, two of Downer's current non-executive directors, Michael Ferguson, Downer's Chief Financial Officer, and John Humphrey, a former Downer non-executive director.
Three existing non-executive directors from the original Spotless board have resigned.
The reshuffle of the Spotless board will be effective from tomorrow Wednesday 19 July.
Downer still recommends remaining shareholders accept the offer to gain a cash premium for their shares and to not become a minority shareholder.
Author: David Simmons