I suspect current offer will be raised. $1.55-1.60?? Hold tight esp as new 5 yr deal re Manus island very close to completion.
roadspectrum has again fired a broadside at its suitor, Spanish giant Ferrovial, a day after increasing its earnings forecast for the financial year to as much as $285 million.
In a letter to shareholders, Broadspectrum chairwoman Diane Smith-Gander said the company, formerly known as Transfield Services, was continuing to undertake a detailed review of Ferrovial’s bid but considered the offer too low.
Ferrovial lobbed a $1.35 per share all-cash offer earlier this month, valuing Broadspectrum, which is best known for operating the Manus Island and Nauru detention facilities on behalf of the federal government, at $715m.
Ferrovial’s earlier bid, made last year, valued the firm at $1 billion, placing significant pressure on Broadspectrum’s board to push for a higher price after rejecting that offer.
Ms Smith-Gander said the current proposal “compares poorly to the trading prices of Broadspectrum shares over the last 12 months”.
When announced, Ferrovial’s offer was at a near 60 per cent premium to Broadspectrum’s share price. But Ms Smith-Gander said it was a 15.6 per cent discount to the company’s share price in June, six months before the offer, when Broadspectrum shares were trading at $1.60.
“The offer has been opportunistically timed to take advantage of short-term weakness in Broadspectrum’s share price,” she wrote. “Accordingly, the directors believe that any premium should be calculated against longer-term share prices.”
Broadspectrum is advising shareholder to take no action in relation to the offer.
Ferrovial, when announcing its offer, took a swipe at Broadspectrum management for poor performance, telling investors its all-cash bid was “particularly attractive” given local firm faced a number of short and medium- term earnings challenges.
“Ferrovial considers this important to Broadspectrum shareholders given Broadspectrum’s recent challenging share price performance and the risks associated with its near and medium- term earnings outlook caused by Broadspectrum’s high concentration of earnings in the defence, social and property segment and the macro-economic challenges associated with various other segments of the Broadspectrum business,” it said at the time.
Since then, Broadspectrum has announced it has been awarded three contracts including a five-year $200m contract to provide power station and mine maintenance services to the Loy Yang A power station and the adjacent mine in a joint venture with WorleyParsons.
The company has also signed a five-year, $950m deal with the NSW government to provide facilities management and property services.
Broadspectrum shares, which had languished at just 85c before Ferrovial’s latest bid, rose 1.1 per cent yesterday to close at $1.33.
http://www.theaustralian.com.au/bus...w/news-story/dfdde1e79efb406036357abee9bed878
