Pacific Equity looks over Spotless books

By Kate Tilley
Correspondent

Published: February 15, 2012 6:00 am ET

Related to this story

Topics Mergers & Acquisitions Injection Molding
Companies & Associations

MELBOURNE, AUSTRALIA (Feb. 15, 2:10 p.m. ET) — Takeover target Spotless Group Ltd. has agreed to show its financial books to potential purchaser Pacific Equity Partners Pty. Ltd. after “carefully considering” shareholder views, but is not backing down from its pricing demands.

Last month negotiations between Melbourne-based Spotless and Sydney-based private equity firm Pacific Equity Partners (PEP) reached a stalemate after Spotless refused PEP access to its books because they could not agree on due diligence terms.

Spotless is a conglomerate with varied divisions, including cleaning, security, catering and a plastics division, Braiform.

Braiform supplies polypropylene garment hangers, packaging and hanger re-use programs to customers in 32 countries. It reported sales of US$219.3 million for the year ended June 30.

Spotless demanded PEP meet five criteria, including increasing its offer price to at least A$2.80 a share, before any sale can proceed. That values Spotless at US$764 million. But PEP is standing by its offer of A$2.63 per share, which values the company at about US$717 million.

In an announcement to the Australian Stock Exchange, Spotless said it still wants no less than $2.80 a share, but will open its books after “carefully considering” shareholders’ views.

Plastics News previously reported two Spotless shareholders, Sydney-based Investors Mutual Ltd. (IML) and Sydney-based Orbis Australia, were unhappy about how the board handled negotiations. IML Senior Portfolio Manager Simon Conn was reported in Australian media as saying it would push for a Spotless board change if it had to. Orbis Senior Portfolio Manager Simon Mawhinney was reported as saying Spotless’s initial refusal to give PEP’s board an opportunity to conduct due diligence was “unacceptable.”

In a statement, the Spotless board said “uncertainty and operational risk” caused by a prolonged argument could potentially damage Spotless’s business and long-term shareholder value.

“Recognizing this potential damage, Spotless directors have concluded it is in the best interests of all shareholders to minimize the period of disruption and offer PEP access to non-exclusive due diligence.”

PEP’s access is subject to a confidentiality agreement and includes various terms. Plastics News understands PEP has received no time limit in which to make a decision, but will probably decide by mid-March.


Comments

Pacific Equity looks over Spotless books

By Kate Tilley
Correspondent

Published: February 15, 2012 6:00 am ET

Post Your Comments


Back to story


More stories

Image

Dow Chemical to merge chlorine operations with Olin

March 27, 2015 12:43 pm ET

Dow Chemical Co. is combining a large part of its chlorine value chain with specialty chemicals and ammunition maker Olin Corp. to create a global...    More

Image

Flextronics launches global injection molding, tooling unit

March 26, 2015 4:29 pm ET

Flextronics International Ltd. (Booth S34125) is officially launching Precision Plastics, a global injection tooling and manufacturing unit, as a...    More

Image

Core Molding buys CPI Binani assets, adds markets, D-LFT capabilities

March 20, 2015 1:20 pm ET

Core Molding Technologies Inc. is expanding its thermoplastics capabilities with the acquisition of substantially all the assets of CPI Binani Inc.,...    More

Image

Proposed Cardia-Stellar merger labeled 'not fair,' but still 'reasonable'

March 20, 2015 10:34 am ET

If the proposed merger of two Australian bioplastics companies goes ahead, the new company will be called Secos Group Ltd. and have annual sales of...    More

Image

Transilwrap buys Clear Focus, expands in advertising films

March 20, 2015 10:03 am ET

Film extruder Transilwrap Company Inc. has bought Clear Focus Imaging, a manufacturer of printable plastic films for large-scale display advertising l...    More

Market Reports

Flexible Packaging Trends in North America

North America represents about 30 percent of the global consumption of flexible packaging. Annual growth in this region is forecast at 4 percent during the next 5 years.

For more insight on growth opportunities, drivers of growth and the outlook for 2015, download this report.

Learn more

Plastics Recycling Trends in North America

This report is a review and analysis of the North American Plastics Recycling Industry, including key trends and statistics based on 2013 performance. We examine market environment factors, regulatory issues, industry challenges, key drivers and emerging trends in post-consumer and post-industrial recycling.

Learn more

Plastics in Mexico - State of the Industry Report

This report analyzes the $20 billion plastics industry in Mexico including sales of machinery & equipment, resins and finished products.

Our analysts provide insight on business trends, foreign investment, top end markets and plastics processing activity. The report also provides important data on exports, production, employment and value of plastics products manufactured.

Learn more

Upcoming Plastics News Events

June 2, 2015 - June 3, 2015Plastics Financial Summit - Chicago 2015

September 16, 2015 - September 18, 2015Plastics Caps & Closures - September 2015

More Events