Broadspectrum defends performance BUSINESSSPECTATOR DECEMBER 8,...

Broadspectrum defends performance

• BUSINESSSPECTATOR
• DECEMBER 8, 2015 4:15PM
• SAVE
• PRINT

Detention centres operator Broadspectrum is still assessing Ferrovial's unsolicited $715 million takeover offer, but said its shares were trading well above the Spanish company's takeover offer $1.35 per share as recently as June.
Broadspectrum, formerly known as Transfield Services, said the company's shares were above $1.60 as recently as June and told shareholders there was no need to take further action on the takeover proposal until the board makes a formal recommendation.
The contracting company said it had delivered on "significant milestones" in the last year, including maintaining around $10 billion of work-in-hand and securing preferred positions on a number of additional contracts worth more than $2bn.
Broadspectrum said it also delivered on upgraded fiscal 2015 earnings guidance, had strengthened the balance sheet and reduced gearing, and recently reiterated its earnings guidance for the coming financial year.
"The company is well placed to benefit from significant opportunities ahead including further outsourcing of government services and the expected improvement in business activity from other key markets in FY2017," Broadspectrum said.
Ferrovial's local subsidiary Ferrovial Services Australia yesterday said its $1.35 per share cash bid represented a 59 per cent premium to the Broadspectrum closing price on Friday.The stock closed on Monday at $1.26, after gaining 47 per cent.
Broadspectrum shares declined 4.38 per cent to $1.20 on Tuesday.
Before Monday, the stock had lost 48 per cent over the year to date, amid increasingly intense divestment pressure from superannuation funds and investor activists over its government contracts.
Ferrovial last year abandoned a proposed $1.02 billion takeover bid for Transfield Services after it failed to win support for its offer.
Transfield had said last December that the offer of $2.00 per share-- sweetened from an initial approach of $1.95 in October -- still undervalued the company.
Broadspectrum is being represented by Macquarie Capital and Herbert Smith Freehills.