Downer launches $1 billion bid for Spotless Group

Downer launches $1 billion bid for Spotless Group

Downer EDI is reported to be in the market for shares in Spotless Group ahead of launching a $1.3 billion bid for the services contractor.

Downer is offering A$1.15 a share in cash for stock it does not already own in Spotless, a 59 percent premium to its close on Monday.

If the deal is executed, it would expand Downer's capabilities beyond its expertise in engineering and construction.

Spotless provides services including cleaning, waste management, catering and maintenance for clients such as sporting stadiums, hospitals and aged care homes.

Now attention turns to Downer's $1.15 a share takeover bid for Spotless and associated equity raising.

"We will assess any proposal in the context of our announced strategy reset, including the recently announced contract portfolio restructure, which is expected to be a material driver of growth and enhanced future performance".

Garry Hounsell, Spotless' chairman, said the company's board continued to believe in the fundamental strengths of the business.

The offer will need to achieve at least 90 per cent shareholder support and regulatory approval to proceed.