Spotless has opted not to hire a defence advisor, despite endless talk of a potential takeover.
The company instead ‘remains on friendly terms with three banks’ that it could call on if it ‘does become the target of an opportunistic buyer,’ reported The Australian on 29 March.
‘Numerous deal-makers around the market were highly sceptical of suggestions one of its rivals was running the ruler over the business several weeks ago, as others were gunning for a defence mandate.
‘But industry sources maintained there was at least one group seriously mulling a potential acquisition — ISS or Sodexo were identified as suspected candidates.
‘Usually, a strategic buyer would not be interested in taking out one of its competitors in the services industry when they can instead simply take over their contracts,’ pointed out The Australian report.
However, Spotless’s contracts are ‘long-dated and difficult to obtain’.
Also, while some of Spotless’s catering assets are known to be of interest to American company Delaware North, according to The Australian a play for the overall operation is ‘unappealing or impossible for a much smaller industry player’.
The Australian also noted that interest in the business has also declined since its shares moved from $1 to about $1.30, increasing the total value of Spotless from about $1.2bn to about $1.4bn. ‘The shares last traded at $1.185, still higher than when they crashed about 40 per cent in December due to a profit warning.’