Australia Markets close in 4 hrs 23 mins

Perenti share price on watch after responding to Downer EDI M&A speculation

James Mickleboro
M&A Letters

The shares of both Downer EDI Limited (ASX: DOW) and Perenti Global Ltd (ASX: PRN) will be on watch on Wednesday amid some M&A speculation.

What is the speculation?

According to the AFR, the auction for Downer EDI’s mining services business is getting close.

The media outlet has reported that binding offers from strategic and private equity bidders need to be submitted by the end of the week to Downer EDI’s adviser and Macquarie Group Ltd (ASX: MQG) subsidiary, Macquarie Capital.

Downer EDI is believed to be looking for offers in the region of $700 million for the mining services business, with Perenti rumoured to be among the frontrunners.

Perenti response.

This morning Perenti responded to the media speculation by advising that it considers different M&A opportunities from time-to-time. It then confirmed that it is currently giving consideration to the potential purchase of Downer EDI’s mining services division.

However, it doesn’t appear to be interested in paying $700 million for the business.

Perenti’s CEO, Mark Norwell, said: “The process is ongoing and Perenti would only put forward an offer to acquire the business if it were to align with its strategy and deliver value for the Company’s shareholders. In particular, Perenti notes that the transaction value speculated in the article is significantly above the level Perenti may consider offering and Perenti would only pursue a transaction that was EPS accretive.”

Mr Norwell went on to advise that “if a transaction is agreed with Downer EDI, Perenti would consider a range of funding options and if an equity raising was to be pursued it would be structured as an entitlement offer only.”

Though, the company warned that there is no certainty that a transaction will eventuate. It will keep the market informed in compliance with its continuous disclosure obligations.

The post Perenti share price on watch after responding to Downer EDI M&A speculation appeared first on Motley Fool Australia.

Analyst Names the Best Blue Chip Shares To Buy Right Now

You’re invited! For a limited time, The Motley Fool Australia is giving away a fantastic FREE report detailing our 3 TOP BLUE CHIP SHARES to buy and own for now and beyond!.

So if you like trustworthy, stable, high-performing companies that pay fat fully franked dividends – we’ve got you covered!

Stock #1 is a beloved old Australian company turning its attention to high-margin businesses... and rapidly returning cash to shareholders with its hefty dividend...

While Stock #2 is an online powerhouse that’s rapidly gaining market share all around the globe... poised for years (or even decades) of tremendous growth...

Even better, Stock #3 offers a whopping grossed-up dividend of over 6%! Which beats the rates on term deposits right out of the water – and offers the potential for capital gains, too.

You can discover all three shares inside our new report right now. To scoop up your FREE copy, simply click the link below right now. But you will want to hurry – this free report is available for a LIMITED TIME ONLY!

Simply CLICK HERE FOR YOUR FREE REPORT!

More reading

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 2020