A draw was the count yesterday on the takeover front, as two bids were revealed – one won immediate acceptance, a second represents a return by a previous bidder, the third saw a private equity predator walk away from a messy situation and the 4th saw the the Australian mining company finally abandon a 17 month wooing.
Dexus Property Group (DXS) scored an immediate tick of approval (there must have been pre-announcement talks) with its offer to buy Investa Office Fund (IOF) in a deal valuing the real estate investment trust at around $2.5 billion.
Dexus offered 0.424 of its securities and about 82 cents in cash for each IOF share, suggesting an offer value of $4.11 per security.
The IOF board intends to unanimously recommend the indicative, non-binding offer, according to the statement.
IOF shares rose 7.3% to $4.11. Dexus securities were up 1% to $7.73. investors seem to be wondering if another fund manager will come in over the top with a higher offer.
In a second bid Spanish infrastructure group Ferrovial has returned for a second crack at the old Transfield Services, now called Broadspectrum (BRS).
The Spanish group launched a hostile $715 million bid and at $1.35 a share directly to shareholders.
Ferrovial’s previous offer of $2 share was rejected by Transfield’s board a year ago.
But the Broadspectrum’s shares have more than halved over the past 12 months to close at 85 cents on Friday and is trading at its lowest levels since early 2014.
After a brief suspension, Broadspectrum shares leapt 47% to $1.255 – investors seem to think the bid is in the bag.
Ferrovial said yesterday it intended to lodge a bidder’s statement to make an all cash offer to buy all of Broadspectrum.
The proposed offer has a minimum acceptance condition of 50.01% and will need approval from the Foreign Investment Review Board.
Santiago Olivares, Ferrovial Service’s CEO, said in a statement that the offer would allow shareholders to realise “a full and fair price for their shares at a significant premium to recent trading prices".
"Our offer provides Broadspectrum shareholders the certainty of cash consideration, eliminating the risks associated with the near term outlook in Broadspectrum shares," Mr Olivares said. "We look forward to engaging with all stakeholders regarding the offer."
The Spanish group is ignoring the Broadspectrum board in taking its offer directly to shareholders. Broadspectrum’s board says it will fight the offer. Good luck.
And in another development, US Private equity group, Providence Equity Partners has walked away from its takeover bid for insurance comparison website iSelect (ISU).
iSelect said in a statement to the ASX yesterday that “recent volatility in iSelect’s health insurance business and management changes have informed the board’s view that there are no reasonable prospects at this time of a board recommended transaction being achieved at a price and on terms that are in the best interests of shareholders”.
Providence announced its “confidential, indicative, non-binding and conditional” offer to acquire iSelect to the ASX on October 13 – the same day iSelect announced the shock departure of its chief executive Alex Stevens. He was one of a number of executives to have walked the plank or been pushed out at ISelect in the last 18 months.
Major iSelect shareholders had wanted a takeover price of $2 a share, but Providence was clearly looking to offer less.
iSelect shares closed at $1.22 last Friday which ended the offer’s chances of success. Like Ferrovial, Providence might return with a firmer, lower priced offer.
The shares dropped 11.1% to $1.08 at the close yesterday. Investors don’t hold much hope for iSelect’s future.
Finally, Iluka (ILU) has at last abandoned its stalking of fellow mineral sands group, Kenmare.
Iluka first approached Kenmare in June of 2014, told the ASX yesterday that it was terminating talks because shareholder support from Kenmare for a takeover was not happening.
Iluka’s suggested paper offer for Kenmare valued the Irish target – which mines in Mozambique and has a main UK listing – at 470 million (around $A1 billion) when it was first put forward. That bid was rejected by Kenmare’s board but later Kenmare decided it would work with Iluka. But Iluka cut its offer as beach sands minerals prices fell and share prices and currencies fluctuated.
Iluka said last month thaat its most recent and final proposal valued Kenmare at 1.8 pence per share as of Friday (up from 1.2p when made in November), which implied a value of about 50 million pounds for Kenmare’s shares. Kenmare’s shares closed in London at 0.44p on Friday.
In other words Kenmare is worthless.
Kenmare has had operational problems at its Moma mine in Mozambique but Iluka said in a statement the offer was ditched because support was not assured: Iluka reckoned that Kenmare’s board couldn’t deliver shareholder agreement on its offer. The way Kenmare’s share price has sagged, there’s a good chance Iluka could be back and buying control from a liquidator.
