Following the recent news of Engineering group Downer EDI’s takeover bid for the caterer and carpet cleaning Perth company Spotless, known best for its role as the caterer for the Melbourne Cricket Grounds.
Downer is currently seeking seats on the board of Spotless, their recent takeover target, following their acquisition of the majority of the shares of the Melbourne-based Australian contract cleaning and catering company.
The engineering group announced late June that it had managed to secure a majority stakeholder position, acquiring 50.3% of the cleaning company’s shares, following the hostile takeover bid announced last March.
The Spotless board, who have repeatedly opposed the bid, said that Downer wants seats as part of its interest to control the carpet cleaning Perth company, and that negotiations would soon begin about the Spotless board’s composition following Downer’s acquisition of the majority of shares.
In a statement made by Gary Hounsell, Spotless’s chairman, to the Australian Securities Exchange, the board stated that they do not believe that the offer made by Downer EDI does not represent the proper value of Spotless as a brand or a company, but that it will engage with Downer nonetheless for the best interests and the sake of the company and all of its shareholders.
The statement had an addendum, saying that Spotless, which operate a string of lucrative cleaning service and facility maintenance contracts across Australia, would remain focused on ensuring that its customers and contracts would continue to receive the company’s services on a ‘business as usual’ basis.
Downer is even went so far as to encourage the remaining Spotless shareholders to accept the group’s offer of $1.15/share, in attempt to acquire the remaining shares of the company. To that end, they have even extended the deadline for the bids from June 26 to the 11th of July due to the group’s newly found majority control, all to acquire the rest of the company’s shares.
Downer EDI made a statement saying that it would not alter its offer, which values Spotless at $1.3B, stating that they had no reason to as there were no competing proposals from rivals. Spotless has generally been seen as ‘underperforming’ since it left private equity ownership and refloated in 2014.