Spotless opens books to PEP

Australian cleaning services company Spotless Group bowed to shareholder pressure and has agreed to open its books to private equity suitor Pacific Equity Partners, but maintained it would not back a takeover offer below A$743 million ($800.43 million), writes Reuters. Pacific Equity Partners in a statement said it still believed its A$711 million offer was attractive and enjoyed broad shareholder support.

Reuters – Australian cleaning services company Spotless Group bowed to shareholder pressure and agreed on Monday to open its books to suitor Pacific Equity Partners, but maintained it would not back a takeover offer below A$743 million ($800.43 million).

In a sign the private equity firm would not give away too much, Pacific Equity Partners in a statement said it still believed its A$711 million offer was attractive and enjoyed broad shareholder support.

Shares in Spotless, which called Pacific Equity’s offer too low and has resisted its approach for nearly three months, rose as much as 3.2 percent to A$2.51 after the announcement, outperforming a 1 percent rise in the broader market.

Spotless said the battle against PEP was disrupting operations and could potentially damage the company’s share price and so agreed to let PEP in the door.

“We have moved to minimise the risks to the business and provide a platform for PEP to bring forward a proposal that shareholders can consider,” Spotless chairman Peter Smedley said in a statement.

PEP first approached Spotless in November with an offer of A$2.63 a share, or A$698 million, then raised its offer in December to A$2.68 a share. Spotless baulked, saying it would recommend nothing less than A$2.80 a share.

PEP refused to raise the bid without having access to its target’s books.

Top shareholders in Spotless have been clamouring to have a look at the A$2.68 a share offer and have been threatening to oust the board over its stonewalling.

Spotless finally cleared the way for PEP on Monday, but did not give the private equity firm exclusive access to its books, saying it was continuing to look for other alternatives.