Industrial services company Spotless Group (SPT) said it plans to make a $556 million off-market takeover offer for Programmed Maintenance Service (PRG), increasing the share price of its target by as much as 15%.
Spotless has a 13.2% interest in Programmed’s issued capital, and says if the groups were to merge, the entity would have a proforma capitalisation of $1.25 billion and be one of the top 150 largest companies by market capitalisation.
Spotless said it believes its target has a strong strategic fit and that the combination of two businesses will create a highly complementary facility services business along service lines, operating geographies and client segments.
“Spotless is attracted to Programmed given the highly complementary nature of their businesses. The creation of the merged group will significantly enhance the service offering to clients,” deputy managing director of Spotless, Jo Farnik said.
Under the terms of the offer, Programmed shareholders will have the option of receiving a maximum $3 per share in cash and 0.825 Spotless shares per Programmed share.
Spotless has offered two other payment methods, with each alternative offering $6.11 for each Programmed share, a 34.6% premium to Programmed’s closing price on Wednesday.
Spotless said debt facilities will be provided by Goldman Sachs JBWere, but may undertake an equity raising as part of the offer.
The offer is subject to 90% acceptance.
Programmed is a provider of property maintenance, asset management, workforce and marine services, managing buildings in the private and public sector throughout Australia, New Zealand and the United Kingdom.
Shares in PRG closed significantly higher, up 15.6% to $5.25, while SPT shares fell by 31 cents or 9% to $3.30.
