APM is believed to be in a standoff with its private equity...

APM is believed to be in a standoff with its private equity suitor CVC, which sources suggest is prepared to offer $1.80 a share for the business but not $2, which it earlier suggested it would offer.

APM Human Services requested its shares be suspended from trading on Tuesday after entering a trading halt on Thursday.

This was after CVC failed to follow through on a $2 per share buyout proposal (equating to a $1.8bn market value) following its period of exclusive due diligence that ended on Thursday.

APM said it had “received approaches from parties to assess the potential for a transaction”.

“Discussions and correspondence with such parties are at a stage where, given the circumstances, the company considers a voluntary suspension necessary to manage its continuous disclosure obligations and allow trading its securities on an informed basis,”

APM has requested the suspension until Friday.

There are suggestions that APM may still be in talks with the global buyout fund.

CVC first came to the table with a $1.60 per share bid, but that was rebuffed.

The understanding is that financing, organised by Bank of America, has been locked in for its $2 a share offer, which demonstrates the break down in talks is around CVC’s reluctance to pay up rather than financing challenges.

Bain Capital showed some interest, but sources have suggested it is no longer around the hoop.

Now there are suggestions that US-based fund Apollo could also be a player, given its ownership of a similar business in the United States.

But Bell Potter analyst Marcus Barnard says it’s “not impossible” that Madison Dearborn considers an offer for APM.

Madison Dearborn owns about 45 per cent of the business and after buying it from Quadrant Private Equity for $1.5bn in 2020, it listed it the following year as a business worth $3.25bn.

However, APM’s share price has subsequently fallen considerably, with its market value now at $1.49bn.

“Given the exclusivity with CVC that ended last week, it would seem unlikely that any potential offers are at an advanced stage,” Mr Barnard said in a note.

“We note that Madison Dearborn has not made any public statements (and nor should they!),” he said.

“A potential fundraising would either see them putting up cash or facing dilution, so it is not impossible that given their position, they could consider an offer.”

Mr Barnard said Madison Dearborn probably knew APM better than any other investor given both its board positions and length of shareholding.

Yet another scenario that could play out, say sources, is that the APM share price crashes and CVC returns with a $1.80 per share down the track, although it does not have a strong history of completing on transactions in the Australian market.