Kerry Stokes' Seven Network Group will determine the success of the takeover approach to GRD by Transfield Services.
And it would be fair to say that at the suggested offer price of $2.70 to $2.75, it has little chance of succeeding because Seven holds 10.3 per cent of GRD's issued shares and remains a 'friend' of the current board.
And Stokes owns 43 per cent of Seven.
In fact there were suggestions that Seven and Stokes are just not interested, meaning the approach will fail, unless there's a change of heart, or a deal is done by Transfield with the GRD board at a much higher price.
Seven picked up its 20 million share holding six weeks ago after the chairman of GRD stepped down and wanted to sell some of his holding.
Stokes, being a Perth businessman, and GRD being Perth-based with board members friendly with the Seven proprietor, paid$47 million for the shares. The price was $2.35 a share.
At the suggested offer price the holding would be worth between $54 to $55 million, which wouldn't be enough to get Seven interested, not when you take into account the personal links between Stokes and GRD chairman, Richard Court, the former Liberal Premier of WA.
GRD shares jumped 17 per cent yesterday to close at $2.81 after the Transfield approach.
But in contrast, shares in Transfield fell sharply as investors took advantage of a falling market and a deal with doubtful logic, to quit the stock. They ended sharply lower at $10.75.
GRD said it had received an incomplete offer for the company that values it at up to $529 million.
GRD said the offer from Transfield Services contains an indicative purchase price of $2.70 to $2.75 per share, with the final price to be set following due diligence.
"The proposal is incomplete and the conditions include GRD Ltd allowing Transfield Services Limited to undertake due diligence," GRD said in a statement to the ASX.
"Transfield Services Ltd has not been granted access to GRD Ltd's records to commence the due diligence process."
GRD said its directors are considering the proposal and will respond soon.
"This approach is further recognition of the inherent value of our company and the existing and potential growth opportunities for both our engineering and advanced waste treatment businesses," GRD chief executive Cliff Lawrenson said.
