Shares in both the Skilled Group (SKE) and Programmed Maintenance Services (PRG) fell yesterday after Skilled rejected Programmed’s takeover offer.
Skilled told the ASX that Programmed’s offer to create a $700 million staffing and facilities management group undervalued the company.
But Skilled chair Vickki McFadden left the way open for Programmed to return with a recast offer, saying in the statement, “We remain open to considering a transaction on terms that appropriately reflect Skilled’s value and contribution to a merged group”.
And it’s for that reason Skilled shares didn’t fall as far as they might have – they lost around 3.6% to $1.45 at the close.
It is likely that without the chair’s statement, the fall would have been far greater.
Her hint that the offer could be revisited seems to have been enough to keep hedge funds and other bid players on the share register.
Programmed’s shares fell 2.9% to $2.35, which seems to have been a judgement that the spurned offer was a better deal for it than for Skilled’s shareholders and that a new offer, if it comes, will not be so generous.
SKE vs PRG 1Y – Skilled rejects Programmed’s offer, for now
Skilled’s opposition to the Programmed bid has been clear for a while and the rejection yesterday didn’t come as a surprise.
Programmed made its “merger of equals” proposal on December 17, offering 0.5032 Programmed shares and 25¢ for every Skilled share and claimed there would be around $20 million in savings from cutting overlaps in staffing and services such as IT.
In rejecting the offer, Ms McFadden said that the terms of the proposal do not fully value Skilled or reflect the combination it would make to the merged group.
“Skilled has strong and diverse businesses … [and] Skilled has a bright future as a stand-alone business,” Ms McFadden said in a statement to the ASX.
Programmed and Skilled have been talking about a possible merger for a long time and have discussed the synergies that could be achieved. That tells us these are two companies which can’t really communicate.
