Shares of employment services firm APM Human Services International surged on Wednesday after private equity firm CVC Asia Pacific improved its buyout bid, valuing the company at A$1.83 billion ($1.20 billion).
Shares soared 20.6% to A$1.700 earlier in the session and were last up 13.8% by 0345 GMT, outperforming the benchmark S&P/ASX 200 index, which traded largely flat.
CVC’s new offer of A$2.00 per share is nearly 25% higher than the A$1.60 bid APM rejected earlier this month, saying it did not sufficiently reflect its “fundamental value”.
The revised offer represents a 41.8% premium to the stock’s last close of A$1.41 on Tuesday.
Although the offer remains below the company’s peak in November, Hebe Chen, an analyst at IG Markets told Reuters that it sets the stage for a potentially mutually beneficial final deal with “great sincerity”.
APM said its board had determined that it was in the best interests of its shareholders to re-engage with CVC and grant it a four-week exclusivity period.
The revised proposal includes an option for APM shareholders to receive all or a part of their consideration in shares in an unlisted Australian public company (HoldCo), the company said.
Funds and investment vehicles advised by CVC Asia Pacific are referred to as CVC Funds.
“CVC’s proactive move to keep the deal talk rolling highlights the promising outlook for APM, which is poised to leverage a fresh economic cycle amid escalating unemployment rates and service demand in its targeted area,” Chen added.
CVC Funds is expected to hold a 33% interest in the HoldCo via a wholly-owned unit, while the latter will own a 100% stake in CVC.
The new bid would also be subject to APM’s key management, including Executive Chair Megan Wynne, electing to receive all or substantial part of their consideration in HoldCo shares, APM said.
Trading in APM was halted before the company’s announcement of the new offer.
Reuters