Spotless board does takeover U- turn
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.