APM suspends shares to mull more offers after CVC dumps $1.8b takeover bid

APM has spared itself a bloody nose from jaded investors nervous about the troubled Perth-based company’s future prospects by suspending trade in its shares.

The announcement on Tuesday came just 30 minutes before trade was due to resume and days after private equity suitor CVC pulled the pin on a potential $1.8 billion takeover offer.

But the company said other suitors were now circling the under-pressure employment and disability services provider and a potential deal was in the works.

“As per media speculation and subsequent to the end of the [CVC’s] exclusivity period, the company has received approaches from parties to assess the potential for a transaction,” the company said.

“Discussions and correspondence with such parties are at a stage where, given the circumstances, the company considers a voluntary suspension necessary to manage its continuous disclosure obligations and to allow trading its securities on an informed basis.”

APM rushed its shares into a trading halt before the opening bell last Wednesday as it revealed CVC had withdrawn a $2-a-share bid after spending four weeks running the ruler over its books.

The takeover tilt last month helped to rescue APM’s share price from freefall after a stunning sell-off by investors drove the stock to as low as 68¢ in late January. CVC’s call to lift its initial bid from $1.60-a-share pushed the stock back above $1.

According to data from Commsec — Australia’s largest stock broking platform — investors had already started lining up to sell down their stakes just hours after the announcement.

The indicative price of APM on Commsec, which is based on the buy and sell orders in the system, was $1.45 per share. The selling momentum typically pushes the price down significantly further once the trading halt is lifted.

In November, APM was savaged on the market after reducing its profit guidance, before copping another beating from investors in January after delivering a trading update for the first-half of the 2024 financial year that was worse than expected.

The re-privatisation of the global business — which employs more than 15,000 people at 1400 sites in 11 countries — would have come less than three years after its bosses and backers banked more than $600 million from investors in a disastrous share market float.

If CVC’s proposal had moved to a binding deal, it would have seen founders and management, led by executive chair Megan Wynne, retain significant ownership of the group.

But a bid at that price would have crystallised a near 44 per cent loss, excluding dividends, for those investors who bought into APM’s record WA float at $3.55 a share in November 2021.

Ms Wynne, who founded APM in 1994, and another private equity group, Chicago-based Madison Dearborn, control more than 60 per cent of the company. CVC would have emerged with 33 per cent of the company, with Ms Wynne, CEO Michael Anghie, other senior executives and Madison Dearborn holding the balance.

APM in January confirmed a plunge in interim profit and the scrapping of its dividend. Many analysts — like Bell Potter’s Marcus Barnard — supported the dividend being shelved given the company’s large debt levels.

By the end of 2023 APM held net debt of about $800 million, a figure which does not include its significant lease liabilities.

Statutory net earnings for the six months to December 31 plunged 81.5 per cent to $7.2 million from $38.9m for the same period in 2022, despite a 31 per cent jump in revenue to $1.1b.

The result included a 35.6 per cent drop in underlying net earnings to $55m from $85.3m, in line with the company’s share-smashing market update in January.