Kelsian spikes as takeover shelved
INTERNATIONAL transport operator Kelsian has shelved its ambitions to make a bid for Uk-listed firm The Go-ahead Group, saying weakness in its share price has scuttled the plan.
Kelsian, which has public and tourism transport operations across Australia and internationally, told the ASX in mid-june that while GoAhead had accepted a $1.5bn bid from a consortium of Australia’s Kinetic and Spain’s Globalvia Inversiones, it was still considering its options.
While the offer had been accepted, until the scheme of arrangement for the accepted deal went through, there was the opportunity for Kelsian to lodge a competing offer.
On Thursday y Kelsian put p the idea to bed, telling the ASX that while the deal made sense in the long term, recent sharemarket ructions made it unviable.
“Unfortunately, recent Australian equity markets have been volatile and external events have adversely impacted the Kelsian share price since June 14, when Kelsian first announced it was considering a possible offer for Go-ahead,’’ the company said.
“The Kelsian board consider that Australian equity market conditions at this time do not enable Kelsian to pursue a possible transaction for Go-ahead despite the longterm strategic and economic rationale of the potential transaction for Kelsian.’’
Kelsian shares were up more than 14 per cent in morning trade on Thursday to $6.22.
RBC Capital Markets said in a note to clients that Kelsian’s move showed discipline.
“As management has stated, we think Kelsian will continue to be on the front foot looking for acquisition opportunities,’’ RBC said.
“At the right price we believe this a good strategy, but note that this adds execution risk to the strategy.
RBC has a price target of $6 on the stock.