The board of cleaning and catering company Spotless has rejected mining services group Downer EDI’s $1.
26 billion takeover bid, describing it as hostile and highly conditional.
A statement from Spotless on Monday said the $1.15 per share offer was opportunistic, timed to take advantage of Spotless’s historically low share price, and did not represent adequate value for shareholders.
It described the bid as “hostile, highly conditional and not certain to proceed”.
“The Spotless board is unwavering in its belief in the fundamental strengths of the business,” Spotless chairman Garry Hounsell said.
“These include a blue-chip customer base and a strong portfolio of long-term government, health, defence and PPP (public private partnership) contracts.”
He said the company’s turnaround strategy was already delivering results.
The board recommends shareholders reject the offer
Spotless said it had also engaged in detailed discussions with a global facilities services company for a potential merger that had greater value than the Downer offer.
But talks ended on April 22 when an agreement could not be reached.
Spotless shares hit an all-time low of 79.5 cents in February after the troubled company signalled a reduction in dividends following a $358 million half-year loss that included heavy writedowns.
Downer launched a takeover bid in March and planned to fund the acquisition through a $1.01 billion rights share issue and debt.
Shares in Spotless closed down 0.45 per cent at $1.105, while shares in Downer were steady at $5.63.