PEP takeover approved by Spotless Board, $2.71 per share

Spotless has agreed to the Private Equity Partners (PEP) takeover bid. PEP will pay $2.71 per share for the cleaning and catering services giant, valuing the deal at about $720 million.

Spotless had been seeking a minimum $2.80 a share from the private equity group.

Shareholders had pressured the board to talk productively with PEP since the private equity firm made its first offer in November.

Shareholders will receive $2.71 per Spotless share comprising $2.62 cash per share, a $0.04 special dividend franked to 95% paid by Spotless and the fully franked $0.05 FY12 interim dividend already paid to shareholders by Spotless on April 12.

‘‘Following extensive discussions with PEP in particular over the past week and a detailed assessment of PEP’s proposal the Spotless board has determined that under the present circumstances the scheme is in the best interests of shareholders,’’ a Spotless statement said.

Spotless chairman Peter Smedley said in coming to its decision the board had been mindful of its obligations to shareholders and the impact the protracted process was having on the business.

“Throughout the process, which has been ongoing since November 2011, we have shared our intimate views of the progress and prospects of the business with all shareholders and we have been firm in our positive views,” Smedley said.

“We are also obliged to seek a resolution on reasonable terms if the interests of the business and shareholders were to be secured.”

Spotless shares, in a trading halt since last Tuesday, last traded at $2.46.

At 11.35am AEST Spotless shares had risen 4.47% to $2.57 after the announcement.