Major shareholder Madison Dearborn emerges as APM’s takeover frontrunner
APM’s biggest shareholder Madison Dearborn Capital Partners has emerged as the frontrunner to take over the embattled employment and disability services provider.
The Michael Anghie-led company has called on the Australian Securities Exchange to grant it more time to do a deal with the Chicago-based private equity group, which holds more than 30 per cent of APM’s stock after snapping up the stake from Quadrant Private Equity in 2020 that at the time valued APM at $1.5 billion.
APM on Friday morning requested its shares remain suspended, saying Madison Dearborn would shortly put forward an offer.
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By continuing you agree to our Terms and Privacy Policy.“The company has now received a letter of intention from Madison Dearborn Capital Partners and related entities stating its intention to submit a non-binding indicative offer to acquire 100 per cent of the issued shares of APM,” the company said.
“MDP have advised that their intention is to submit the NBIO during the morning of Friday 5 April 2024 (Chicago, US Time), being the evening of Friday 5 April 2024 AWST.
“The extension of the voluntary suspension is requested to allow the company to receive and consider the terms of the NBIO and disclose those terms to the ASX in order for the company’s shares to trade on an informed basis.”
APM suggested it was hoping to thrash out a deal over the weekend and resume trade on Monday. Its shares last closed at $1.63.
The company had spared itself a looming stock rout by suspending its shares from trade on Tuesday when it reveal several suitors had expressed an interest in a buy-out.
That came just days after APM locked its shares in a trading halt to drop the bombshell news that CVC had binned a $1.8 billion proposal priced at $2 a share after spending a month poring over the company’s books.
The takeover bid lobbed by the private equity giant last month had helped to rescue APM’s share price from freefall after a stunning sell-off by investors drove the stock to just 68¢ in late January.
According to data from stockbroking platform Commsec, investors started lining up after the pause in trade to sell down their stakes just hours after it was revealed CVC had walked away.
APM’s market woes started in November when it slashed its profit guidance. The sell-off gathered pace in January after it delivered a worse-than-expected first-half trading update that saw a 35 per cent fall in underlying net profit to $55 million — 33 per cent short of consensus expectations.
It reported statutory net earnings for the six months to December 31 had plunged 81.5 per cent to $7.2m from $38.9m for the same period in 2022, despite a 31 per cent jump in revenue to $1.1b.
The fall was attributed to low unemployment that had reduced its government-funded job placements in Australia and Britain and made it harder to find staff for its allied health business.
At the time, analysts and informed observers said it could be time for the group to pause its acquisition-driven growth strategy and prioritise reducing its $1b pile of debt quicker.
Investors’ nerves were also exposed late last year amid a review into the National Disability Insurance Scheme that outlined a raft of proposed changes to rein in costs and tighten up services of the $40b payment system.
The re-privatisation of APM — which was founded by Megan Wynne and employs more than 15,000 people at 1400 sites in 11 countries — comes less than three years after its bosses and backers banked more than $600 million from investors in a disastrous share market float.
But even at a bid price close to CVC’s ill-fated $2-a-share offer, it would still crystallise a hefty loss, excluding dividends, for those investors who bought into APM’s record WA float at $3.55 a share in November 2021.
Ms Wynne — together with Perth IVF specialist husband Bruce Bellinge — remains APM’s biggest shareholder, with an interest of just over 34 per cent, according to the company’s latest annual report.
Originally published as Major shareholder Madison Dearborn emerges as APM’s takeover frontrunner