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DOWNER EDI (ASX: DOW) has closed its unconditional takeover offer for Spotless Group (ASX: SPO) and not offered an extension, as it forecasts a five per cent lift in annual profit to $190 million for FY18.
The engineering contractor and train builder closed its offer for Spotless, which values the takeover target at $1.3 billion, on Monday at 7pm and announced the offer was now closed.
Downer EDI owns 87.8 per cent of Spotless shares on issue, which is short of the 90 per cent it needed to make a compulsory acquisition.
As it announced the Spotless offer had closed, the company announced its FY17 results and provided guidance for the year to June 2018 but said it would update that once it had completed a review of the Spotless business.
"The group's strong competitive position in all of its major markets, coupled with market growth, is driving significant opportunities across all businesses," Downer says in an ASX statement.
For FY17, Downer EDI reported profit of $181.5 million, a rise of 0.5 per cent, and a revenue increase of 5.7 per cent to $7.8 billion.
Four of its five divisions which include transport, rail, utilities and engineering, construction and maintenance increased earnings before interest and tax with mining the only underperformer with a decline of 35.8 per cent EBIT on the previous year.
The transport division increased its EBIT 20.2 per cent to $124.6 million with the company securing new contracts including the Newcastle Light Right while rail EBIT more than doubled to $30.3 million.
Downer EDI launched its hostile takeover in March and the Spotless board resisted the move and consistently said its $1.15 a share offer severely undervalued the facilities management company.
The Spotless board eventually caved in July when Downer achieved a 62.3 per cent stake and recommended shareholders accept the offer.
Spotless shares were exactly $1.15 at the close of trade on Monday which matches the Downer offer price.
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