Market punters (hedge funds) drove Spotless Group shares up more than 22% yesterday at one stage in the wake of the company’s rejection of an approach from an unknown private equity group.
Spotless said the offer was a conditional bid.
Spotless shares jumped after the approach was revealed, the shares hitting a day’s high of $2.37 before easing to be up 12.5% for the day, or 24.5c, at $2.20.
Market reports said the approach came from the Blackstone Group of the US, but there was no confirmation.
Media reports Tuesday morning treated Blackstone as the bidder, even though there has been no confirmation.
Blackstone also is in the processing of buying the enfeebled property investor, Valad at the moment.
Spotless said its directors had considered the $2.50 a share proposal and "believe that it does not reflect the fundamental value of the company in the context of a change of control".
Spotless said it does not intend to take any action in relation to the indicative, non-binding and conditional proposal.
The offer from the unnamed private equity firm was to buy all of Spotless’ shares via a scheme of arrangement.
Three years ago this month, Spotless launched an abortive attempt to buy services rival, Programmed Maintenance Services Ltd for $500 million with a share and cash offer at $6.11 when launched.
The offer is well above the 52 week low of $1.655 hit in March of this year, but 8% under the year’s high of $2.73 hit a year ago.
The deal has no chance without board support and a much higher price.
Bear hug or stand off?
