More private equity artists sniffing around Australian companies yesterday with at least two groups in the target zone.
One was pet and vet group, Greencross (see separate story) where the interest is vague as this stage – to other, more definite was a near $2 billion offer to take education group Navitas private by a group including co-founder Rod Jones who only stepped down as CEO earlier this year.
Yesterday’sactivity follows the $1.75 billion buyout offer for accounting software group, MYOB earlier this week.
The offer is only that at this stage, but the news saw Navitas shares jump more than 22% in trading at one stage and ended up 21.8% at $5.30.
Mr. Jones’ partners in the offer are newish Australian buyout group, BGH Capital and industry fund AustralianSuper who teamed up earlier this year to make a $4.1 billion offer for hospitals group, Healthscope that went nowhere.
Led by BGH, the consortium is seeking to buy all the outstanding shares in Navitas, offering $5.50 cash a share. That’s a 26% premium to the company’s closing price on Tuesday.
“I believe this is a fair and equitable deal, struck at an appropriate premium to Navitas’ prevailing share price, and is in the best interests of all Navitas shareholders,” said Mr. Jones, who resigned as the company’s chief executive in February.
“I remain passionate about the Navitas business and the education sector, which is why I have agreed to vend half my shareholding into the new holding company.”
Mr. Jones has a 12.6% stake in Navitas, and AustralianSuper, the nation’s biggest super fund, holds 5.4%.
The bid from BGH and Australian Super mirrors the approach to Healthscope where AustralianSuper holds a much larger 16.4% and can determine the success of any future bids.
Navitas is an international education provider, located across Australia, North America, Europe, Africa, and Asia, with a focus on offering students bridging courses to qualify students for entry to universities, and English language classes.
It took $130 million in impairments and losses in the year to June 30 this year for restructuring one of its businesses and changing another in Australia. There will be a smaller, $5 million impact in the current financial year. That, plus revenue weakness saw the shares sag for much of the year.
The bidding group has also proposed an alternative offer for shareholders to receive $2.75 cash for each Navitas share and one ordinary share in the newly formed unlisted company RollCo, which would initially own Navitas, for every two shares held in Navitas.
In a statement, the Navitas board said it was yet to form a view on the consortium’s proposal and was reviewing the offer with its financial adviser, Goldman Sachs, and legal adviser Ashurst.
“We will conduct a detailed review of the proposal and will inform shareholders of the outcome of this review in due course,” it said.
