We have now moved to the pointy end of the long and winding takeover battle for Broadspectrum (the former Transfield Services) after Spanish infrastructure group Ferrovial yesterday raised its hostile takeover bid by 15 cents to $1.50 a share and declared its revised offer “final".
That moved put pressure on investors to accept the higher offer price, or risk a fall in the contractor’s share price.
Broadspectrum’s board rejected Ferrovial’s previous offer of $1.35 a share and only 2% of the contractor’s investors have accepted the bid.
The new offer, revealed yesterday, remains open for acceptance until May 2. The new higher price is under the “fair value” range for Broadspectrum of between $1.60 and $1.85 a share suggested by independent expert EY (Ernst & Young).
Broadspectrum’s shares closed at $1.25% on Tuesday night, but jumped 8% on the news as the market opened yesterday.
But the Broadspectrum board rejected the higher offer, down went the shares and they ended the day up 2% at $1.35 – in other words, shareholders are looking at another loss if the Spanish company’s new offer fails.
Ferrovial Services chief executive Santiago Olivares said in yesterday’s statement the new offer represented a “full price” for Broadspectrum.
"We encourage all shareholders to accept this cash offer at a premium value rather than risk their shares returning to pre-takeover price levels," he said.
Ferrovial first approached Broadspectrum when it was called Transfield Services in late 2014, offering $2 a share.
The board rejected that and the shares fell as low as 83 cents before the Spanish group reappeared with its lower offer last year.
Ferrovial has already received the necessary approvals from the Foreign Investment Review Board and New Zealand’s Overseas Investment Office.
The Broadspectrum board has already cost shareholders who have remained with the company over the last 18 months 50 cents a share
Broadspectrum’s board yesterday rejected the new offer, and told shareholders to take no action.
"The increase in the offer is welcome, but unfortunately is not sufficient to be capable of being supported by the board," said Broadspectrum chairman Diane Smith-Gander. "As such, the board unanimously recommends that shareholders reject the revised offer."
Ms Smith-Gander said Broadspectrum’s board had held talks with Ferrovial but “had been unable to reach an agreement.
"The board will continue to work in the best interests of shareholders, and remains open to considering any offer from any party that maximises shareholder value."
Sounds like another loss for Broadspectrum shareholders coming up if Ferrovial walks.
