Spot­less board does takeover U- turn

Townsville Bulletin - - NEWS - MELISSA JENKINS

SPOT­LESS Group’s di­rec­tors have back­flipped and rec­om­mended share­hold­ers ac­cept a $ 1.3 bil­lion takeover bid from engi­neer­ing com­pany Downer EDI.

The Spot­less board had un­til Mon­day rec­om­mended share­hold­ers re­ject the of­fer but yes­ter­day they said they had changed their minds, “re­luc­tantly” rec­om­mend­ing share­hold­ers ac­cept the of­fer.

“We con­tinue to be­lieve in the strong un­der­ly­ing fun­da­men­tals of the Spot­less busi­ness, how­ever, now that Downer owns 67.279 per cent of Spot­less and will con­trol a ma­jor­ity of the board from ( to­day), on bal­ance, we re­luc­tantly rec­om­mend that share- hold­ers ac­cept the Spot­less chair­man said in a state­ment.

The di­rec­tors said they had changed their po­si­tion be­cause the Downer di­rec­tors who will con­trol the Spot­less board from to­day could not be re­lied upon to ad­vance the com­pany’s strat­egy to boost earn­ings.

“This re­con­sti­tuted board may not un­der­take the strat­egy re­set in the man­ner which the cur­rent board was con­fi­dent would drive both strong earn­ings and cash­flow growth over the medium term,” the state­ment said.

Downer has nom­i­nated four di­rec­tors to join the Spot­less board: two of its non- ex­ec­u­tive di­rec­tors, Philip Gar­ling and Grant Thorne, its chief fi­nan­cial of­fi­cer Michael Ferguson and Downer of­fer,” Garry Houn­sell for­mer Downer non- ex­ec­u­tive director, John Humphrey.

Three non- ex­ec­u­tive di­rec­tors of Spot­less – Diane Grady, Nick Sherry and Julie Coates – will re­tire and Mr Houn­sell will con­tinue as chair­man, while Si­mon McKeon and Spot­less CEO and man­ag­ing director Martin Shep­pard will re­main as di­rec­tors.

Downer no­ti­fied the ASX that it passed the 67 per cent mark on Mon­day, af­ter launch­ing its hos­tile takeover bid in March.

It was of­fer­ing $ 1.15 for each Spot­less share, valu­ing the fa­cil­i­ties man­age­ment firm at $ 1.3 bil­lion.

Last month, the Spot­less board said the com­pany had mo­men­tum, hav­ing started de­liv­er­ing ser­vices un­der a con­tract at Royal Ade­laide Hos­pi­tal.

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