Downer EDI is starting to gobble up Spotless Ltd.
Downer had a 59.6% stake in Spotless yesterday and is confident of getting to the 90% level (where it can mop up the remaining 10%) in the near future.
CEO Grant Fenn said in Sydney yesterday that he was hopeful of gaining full control soon, and ultimately delisting the Melbourne-based company.
Downer moved 50% on Tuesday in its $1.2 billion bid for Spotless which was then extended to July 11.
“This strategy with services will be a winner, we’re very confident of that," Mr Fenn told The Australian Financial Review’s National Infrastructure Summit in Sydney on Wednesday.
According to a report in the AFR Mr Fenn acknowledged that Downer has stuffed up early on with its big $1.1 billion cash raising to finance the bid (at $1.15 a Spotless share) that ended up badly undersubscribed, leaving underwriters and sub underwriters to bear the pain.
"The equity raising didn’t go as well as we would like, Mr Fenn said. “We did underestimate the market’s view of Spotless,” according to the report in the AFR.
"This business should be predictable. Our aim is to make Spotless that way,” he said.
Since the issue debacle, Downer’s share price has recovered to around $6.28 at the close yesterday after hitting $5.21 on April 18 when the shortfall in the main part of the issue became apparent.
Before the Spotless bid, Downer shares were at $7.20 in mid-March.
