Shares in pet and vet group, Greencross Limited yesterday jumped more than 17% on confirmed market speculation that the underperforming company remains a target of private equity groups.
The speculation follows the emergence of the $1.75 billion KKR bid for accounting software group, MYOB earlier this week.
Greencross shares jumped and closed at $4.88, up 17.8% which values the company at $582 million.
That’s a big move and a half billion plus valuation is a significant amount, but back in 2016, the previous management rejected a non-binding approach from US buyout artists TPG which valued Greencross at a much larger $740 million.
So those shareholders still in the company from then will want to make sure a bid is not rejected out of hand and is given close consideration.
Like MYOB, Greencross is something of a fallen market favorite as rising costs, weak returns from acquisitions and the normal complexities of doing business weigh upon revenues and earnings. Management was changed in the past year and a new strategy announced.
In yesterday’s statement to the ASX, Greencross said it “confirms that it has received and is engaging with a number of parties regarding credible proposals.”
“The proposals are subject to a number of conditions and are expressed as being non-binding and incomplete. The proposals are required to be kept confidential, and there is no certainty that any proposal will result in a transaction involving Greencross, what the terms of any such offer would be, or whether there will be a recommendation by the Board of Greencross.
“Greencross is aware of its continuous disclosure obligations under ASX Listing Rules and will ensure it is in full compliance at all times,” it reminded investors.
