Ferrovial Makes A$715 Million Cash Offer for Broadspectrumby
Spanish group bid more than A$1 billion for company last year
Largest shareholder Allan Gray says bid is `opportunistic'
Ferrovial SA offered A$715 million ($524 million) for Broadspectrum Ltd., almost a year after the Australian services provider rejected a bid from the Spanish company valuing it at more than A$1 billion.
The Madrid-based firm offered A$1.35 a share in cash, or 59 percent more than Broadspectrum’s closing price on Dec. 4, it said in a statement Monday. The target surged 48 percent, the most on record, to A$1.255 at the close in Sydney.
Broadspectrum’s shares had almost halved this year, prior to Monday’s announcement, after it rejected a A$2-a-share proposal from Ferrovial last December. The company, formerly known as Transfield Services Ltd., has reported falling earnings in its resources and industrial business and faced uncertainty over a contract to maintain offshore detention centers for the Australian government, according to Richard Whiteoak, an investment analyst at Broadspectrum’s largest shareholder Allan Gray Australia Pty.
“We view it as an opportunistic bid, and we don’t think it recognizes the full value of the company,” Whiteoak said by phone from Sydney. Allan Gray owns 18.7 percent of Broadspectrum, data compiled by Bloomberg show.
Broadspectrum is negotiating a new five-year contract to manage immigration detention centers for Australia on Manus Island and Nauru, according to a Nov. 30 exchange filing. It was named the preferred bidder for the contract on Aug. 31.
The company employs more than 25,000 people across 18 industries and 9 countries, according to its website. It is considering the new offer from Ferrovial and advised shareholders to take no action, Broadspectrum said in a separate statement.
Ferrovial, which operates in more than 25 countries and has about 69,000 employees, is a global infrastructure operator and services company that manages transportation assets from Canada’s 407 ETR highway to London’s Heathrow Airport, its website shows.
Acquiring Broadspectrum would fit Ferrovial’s strategy of expanding globally and meets the group’s “strict investment criteria,” Ferrovial Chief Executive Officer Inigo Meiras said in the statement.
The offer is subject to approval by Australia’s Foreign Investment Review Board and needs to be accepted by at least 50.01 percent of shareholders to be successful, according to the statement.
UBS Group AG and law firm Allens are advising Ferrovial. Macquarie Group Ltd. is advising Broadspectrum.