let the fun begin

Edited by Sarah Thompson, Anthony Macdonald and Gretchen Friemann

As dealmakers await to see whether the post-election M&A boom plays out, one company that is believed to have attracted the attention of an offshore buyer is Servcorp.

Street Talk understands Servcorp, which provides virtual and serviced offices to businesses across the globe, quietly turned down an approach from a potential suitor in recent weeks.

It’s understood the approach came from a trade player who is still considering its next move, and was advised by one of the major investment banks.

Servcorp’s decision not to disclose the approach comes soon after Macquarie Capital-advised Emeco Holdings was applauded by its shareholders for secretly sitting on an initial proposal from two private equity firms.

In Servcorp’s case, shareholder support would also seem firm given the Moufarrige family-owned Sovori Pty has a majority shareholding. Servcorp’s chief executive is Alf Moufarrige, while one son, Taine, is a non-executive director and another son, Marcus, is the company’s chief operating officer.

Simon Marais’s Allan Gray is the next biggest shareholder with a 12.75 per cent stake, even after it trimmed its holding earlier this month, ahead of Acorn Capital.

Servcorp is a bet on the global economic environment. It offers virtual offices and serviced offices to start-ups and small- to medium-sized businesses, with 57 per cent of its floorspace from outside of the Australia/south-east Asia region.

The company is also sitting on $99.8 million cash at June 30, and its shares had $1.96 net tangible asset backing. Servcorp shares are up 26 per cent over the past 12 months, while the broader Small Ordinaries Index is down about 2 per cent.