Downer secures majority stake in Spotless

Spotless continues to urge remaining shareholders to reject bid.

Spotless is urging remaining shareholders to retain their minority stake in the cleaning, catering and facilities management group ahead of next week’s deadline.

Downer confirmed at the end of last week it had secured a more than 60 per cent stake in the cleaning, catering and facilities management group – three months after initially launching its $1.3 billion takeover bid.

Investors now have until 11 July to accept the $1.15 per share takeover offer following a two week extension.

On Friday Spotless chairman Garry Hounsell told remaining shareholders not to feel pressured to accept Downer’s offer.

“The board has been consistent in its view that the Downer offer does not represent adequate value,” Hounsell said.

“Shareholders should not be pressured into accepting Downer’s offer now that control has passed and should have regard to the Board’s consistent view on value and Downer’s confidence regarding the future performance of Spotless.”

Spotless also noted recent statements made by Downer CEO Grant Fenn in relation to the future prospects of Spotless under Downer control.

Speaking at the AFR Infrastructure Conference in Sydney on Wednesday 28 June, Fenn made a number of statements regarding Downer’s acquisition of control of Spotless, stating his expectation that “[t]he strategy with services will be a winner”.

Fenn also highlighted Downer’s plans to target the fast-growing health and education sectors, as well as government facilities services in defence and prisons.

“Mr Fenn failed to acknowledge that targeting these sectors is actually already part of the Spotless’ strategy reset which has been underway for some six months now and which is already beginning to deliver earnings benefits for Spotless,” the company said in a statement issued to the ASX.

Hounsell said Spotless was pleased that Downer and Fenn agree with Spotless’ strategy around sector prioritisation and that Downer intends to continue with this strategy as majority shareholder.

“The strategy reset and our strong focus on execution is driving strong positive business momentum and demonstrating results,” he said.

“For our remaining shareholders, Mr Fenn’s statements can provide some comfort that Downer endorses core elements of Spotless’ existing strategy.”

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