Cleaning, catering and facilities management group Spotless has once again urged shareholders to reject Downer’s $1.2 billion takeover offer.
In the statement issued by Spotless this week the company said it “continues to believe that the Downer offer is not in the best interests of all shareholders and does not represent adequate value.”
Downer extended its takeover offer for a second time last week, with the deadline now set for Thursday, 29 June.
Downer also agreed to waive all remaining conditions, and introduce accelerated payment terms, if it reaches a 50 per cent acceptance level by Monday, 19 June.
Spotless Chairman, Garry Hounsell said: “Downer is clearly seeking to stimulate some momentum for their offer but, as we have maintained from the start, this offer does not reflect adequate value.”
“Shareholders have a clear choice – accept Downer’s offer, or back the board’s considered judgement that there will be greater value in the medium term by remaining a Spotless shareholder.”
Hounsell said the business is currently “demonstrating positive momentum.”
“Our contract portfolio is being optimised for growth, investment in business development capabilities is driving increased win and renewal rates, and we have a strong pipeline of opportunities.
“We have a market leading portfolio of PPP contracts with total lifetime revenue of $10.8 billion, with new PPP mobilisations progressing well and wins continuing,” he said.
“Downer can clearly see the strategic value of Spotless. In their own words, Spotless will provide Downer with: ‘stable businesses with resilient earnings’; ‘long term contracts providing high certainty over revenues’; and ‘a diversified contract portfolio across a high quality customer base’,” Hounsell said.
Spotless said it also estimates Downer shareholders will benefit from material synergies worth $0.11 to $0.33 cents per Spotless share – approximately 10 – 30 per cent of the offer price.
“The Spotless directors continue to unanimously recommend that shareholders reject the Downer offer,” Hounsell said.
Last week Downer CEO Grant Fenn said the $1.15 per share offer provides a “full and fair price” for Spotless shares.
The recommendation by Spotless to its shareholders comes as the cleaning group is faced with a second class action over its 2015 profit downgrade.
Law firm Slater and Gordon filed proceedings at the end of last month on behalf of shareholders who acquired an interest in Spotless shares from 25 August 2015 to the close of trade on 1 December 2015.
The statement of claims includes allegations of contraventions of the Corporations Act 2001 in relating to misleading or deceptive conduct and continuous disclosure obligations.
Earlier this year in February IMF Bentham and William Roberts Lawyers launched a class action against the cleaning and facilities management services group over its 2015 financial results.
