Industrial services company Spotless has given in to shareholder demands and will allow its private equity suitor to cast its eye over the Spotless business.
Pacific Equity Partners (PEP) and Spotless have agreed to the terms on which PEP will be granted non-exclusive due diligence, the takeover target said in a statement on Monday.
The private equity firm began chasing Spotless in late 2011, making a hostile takeover offer in November.
PEP offered $2.68 for each Spotless share, valuing the company at about $711 million.
But Spotless demanded the offer be increased by about $32 million to $2.80 per share before it would grant PEP access to its accounts for due diligence.
Spotless still wants $2.80 per share, but has conceded access to its books after concerns were raised by its shareholders, the company said.
The Spotless board gave particular consideration to the potential damage to business and long-term shareholder value from the uncertainty and operational risk caused by the PEP takeover proposals, it said.
The board decided it was in the best interests of all shareholders to minimise the period of disruption.
"We have moved to minimise the risks to the business and provide a platform for PEP to bring forward a proposal that shareholders can consider," chairman Peter Smedley said.
A PEP spokesperson said the $2.68 per share offer still represents an attractive premium, and has broad shareholder support.
"We intend to engage with the company in accordance with the due diligence arrangements that have been agreed in principle," they said.
There is no guarantee that any takeover proposal will eventuate, Spotless said.
Spotless shares added seven cents, or 2.88 per cent, to close at $2.50.
