SPT Takover Offer For PRG
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     dennis_menace
Member
Username: dennis_menace
Post Number: 1062
Registered: 09-2002Rating: N/A
Votes: 0
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| | Thursday, March 27, 2008 - 07:31 pm: |  
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Is this attempted takeover one too many?
A.
Note - the divergence's of the MACD and OBV shown compared tp the price action.
Spotless Announces Takeover Offer for Programmed Maintenance Services valued at $6.11 Per Share
Spotless Group Limited (Spotless) announces its intention to make a takeover offer for Programmed Maintenance Services Limited (Programmed) (the Offer), offering Programmed shareholders three Offer Consideration alternatives
A flexible Offer that provides Programmed shareholders with the opportunity to share in the potential upside of the Merged Group by receiving all or part of their Offer Consideration in Spotless shares and up to $3.00 in cash per Programmed share
Under each of these alternatives, the Offer has a value equivalent to $6.11 per Programmed share based on Spotless’ Volume Weighted Average Price (VWAP) of $3.77 for the 10 trading days up to and including 26 March 2008
Highly attractive 34.6% premium for Programmed shareholders1 valuing Programmed’s equity at approximately $556 million2
The combination of these highly complementary businesses will create a leading facility services business in Australia and New Zealand
Estimated pre-tax synergies of approximately $18 million per annum in the second full year of ownership
Spotless has a total relevant interest of 13.2% in Programmed shares that includes an interest of 10.3% pursuant to pre-bid acceptance agreements entered into with some of Programmed’s largest shareholders, indicating their support for the Offer
Spotless to have pro forma market capitalisation of approximately $1.25 billion following the takeover, strengthening its position in the S&P/ASX 2003
Spotless Group Limited today announced its intention to make an offer to acquire Programmed. Maintenance Services Limited to create a leading integrated facility services business in Australia and New Zealand. The Offer will be effected through an off-market takeover bid by Spotless for all the shares it does not already own in Programmed. Spotless has a relevant interest in shares totalling 13.2% of Programmed’s issued capital that comprises 2.9% in direct beneficial ownership and 10.3% in shares pursuant to pre-bid acceptance agreements entered into with some of Programmed’s largest shareholders. The key terms of the pre-bid acceptance agreements are set out in Annexure B.
Overview of the Offer.
For each Programmed share, Programmed shareholders will have the choice to receive their Offer consideration under one of three alternatives:
1) All Share Alternative: 1.620 Spotless shares per Programmed share; or
2) Majority Share Alternative : $1.50 in cash plus 1.223 Spotless shares per Programmed share; or
3) Maximum Cash Alternative: $3.00 in cash plus 0.825 Spotless shares per Programmed share
Under each of these alternatives, the Offer represents value of $6.114 for each Programmed share, valuing Programmed’s equity at approximately $556 million2 and implies an enterprise value of approximately $760 million5.
The Offer is subject to the conditions set out in Annexure
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macka
Member
Username: macka
Post Number: 191
Registered: 10-2003Rating: N/A
Votes: 0
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| | Thursday, March 27, 2008 - 10:18 pm: |
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Dennis
Having worked with one ( SPT - The Hunter ) and currently employed by the other ( PRG - The Hunted ) I would make the following comments that are personal opinions only.
* Spotless does not have a good history in optimizing its returns from its current business structure. e g Ranging from hotdogs at the MCG to returns from Defence contracts in the NT and plastic coathangers in the USA.
* The history of Spotless maximizing synergies from aquisitions ( Takeovers ) is not good.
* Programmed Maintenance Services is currently successful by controlling cost management and obtaining good gross margin results
* Spotless currently struggles in its existing format and would be better placed in rationalizing its current strategy than hiding behind further aquisition issues.
* A better outcome for all shareholders would be a reverse takeover by PRG of SPT to allow a stronger focus on a Facilities Management / Maintenance Business unit
My overall assessment:-
* For PRG shareholders who are in the Stock
Market to make money for themselves take the money and run hence picking up the market downturn losses of the last four months
* For anybody who cares about the long term prospect of PRG hold on because it has stronger fundamentals than SPT and hence has the long term prospect of greater strength in the market or a superior bid from either SPT or others.
Regards macka
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