Seven months after rejecting a takeover bid from two of its existing shareholders, Australian toll road operator Transurban has again said no to a revised offer from the same bidders and a new investor.
But Transurban’s board of directors, advised by Lazard, has rejected the proposal saying that it is too low, representing “a premium of only 21 percent to the underwritten issue price for the group’s securities,” the company said in a statement. It also rejected a secondary proposal from the consortium offering A$5.42 per Transurban share if the company chooses to go ahead with its planned capital raising.
CPPIB and OTPP had initially offered to take over Transurban for A$5.25 per share late last year. The offer, which valued the company at A$6.81 billion, was rejected for being too low.
The latest rejection raises the possibility that the three consortium members, which hold about 40 percent of Transurban, will retaliate by selling their stakes and exiting the company quickly. A thinly-veiled threat to that affect came from an anonymous source speaking to Dow Jones:
“What is clear is that [Transurban’s] management have adopted a stand-alone-at-all-costs position at the expense of shareholders. What is clear is that the bidders have a history of exiting positions quickly when they believe that it is in the best interests of their investment,” the source warned, adding that the consortium wouldn’t seek to submit any further bid.
Transurban said in its rejection letter that it “remains willing to explore opportunities for constructive and harmonious relationships with members of the bidding group”.