A revised offer by The Carlyle Group and National Hire Group, a tools and equipment hire company listed on the Australian stock exchange has been rejected by Coates Hire, a rival to National Hire.
The latest offer at A$6.29 a share on an ex-dividend basis values the company at A$1.6 billion ($1.3 billion; €967 million). Coates said it “continues to undervalue the Coates operations.”
The previous offer was made at $6.25 in cash for each Coates Hire share, including dividend payable.
Bill Cutbush, chairman of Coates said: “The independent board committee has unanimously concluded that this bid continues to undervalue the Company and is again not at a level that justifies recommendation to its shareholders.”
“The emergence of a higher bid indicates that the decision to reject earlier offers was correct and the Independent Board Committee maintains this view in relation to the latest offer.”
Coates also clarified in a filing that the offer submitted included a payable final dividend of 11 Australian cents a share Coates shareholders are already entitled to.
Moreover, the offer “contains numerous material conditions including in relation to financing and other material commercial matters which are unacceptable to the Independent Board Committee.”
The US subprime mortgage crisis may have had an impact on global credit and equities markets but the Australian stock market is only less than 3 percent down from its peak, and many companies haven’t changed their views on their worth, said a local banker.