For those looking for a carpet cleaner in Perth and wondering if the cleaning services industry has its fair share of competition, yes. It most certainly does.
Recently, Downer EDI launched an effort to takeover Spotless, the Australia integrated services company, with a $1.15/share bid made with cash, totalling to a whopping $1.27B bid. The bid was then flagged by thewest.com.au sometime yesterday in the afternoon and by WestBusiness sometime this morning. The bid is an attempt by Downer to control the remaining 80% of stake that it doesn’t have.
Spotless has stated to its shareholders to wait until the board can properly evaluate and decide on the massive offer. According to the company’s chairman, Gary Hounsell, the board would make their decision regarding the offer based on the context of their recently altered strategy, which included a restructure of their contract portfolio, among other things.
Downer made a lot of moves for this brazen offer, which follows Downer’s move to take control of nearly 15% of Spotless stocks, increasing the group’s stake in Spotless to 19.9%, after they made a withdrawal from investment bank, UBS.
The offer price of $1.15/share was made when Spotless’s stocks closed yesterday at 72.5¢. In response to the offer, shares in the company bounced back, rallying an increase after hearing the news. At the close, the company had a stock price of $1.08.
Grant Fenn, Downer’s Chief Executive, states that the acquisition is a big part of the group’s strategy to expand its fields, which already cover resource acquisition, education, corrections, etc., and reinforce its status as a leading service provider to its customers in the Oceania region, particularly in Australia and New Zealand.
According to Mr. Fenn, the offer is a compelling transaction, both from a financial and strategic point of view, seeing as it could, potentially, lead to growth across the company and drive up shareholder values.
As of yesterday’s closing, Spotless is capitalized at approximately $796 million.
Those who enjoy Spotless’s services, not least of which is being one of the leading handlers for carpet cleaner in Perth, may want to keep an eye on the stocks in the days to come.