Spanish infrastructure company Ferrovial has upped its takeover offer for Broadspectrum, the renamed Transfield Services.
The bid has been increased 11% from $1.35 to $1.50 a share, valuing the company at $768.69 million.
A short time ago, Broadspectrum shares were up 8% to $1.25.
Santiago Olivares, CEO of Ferrovial, says the revised offer is compelling.
“We encourage all shareholders to accept this cash offer at a premium value rather than risk their shares returning to pre-takeover price levels.”
The offer is subject to Foreign Investment Review Board approval and a 50.01% minimum acceptance.
However, the board of Broadspectrum says the offer is still too low.
An independent analysis commissioned by Broadspectrum put the value of the shares between $1.60 and $1.85 cash.
“While the increase in the offer is positive for shareholders, the revised offer continues to undervalue Broadspectrum’s shares,” says Broadspectrum chairman Diane Smith-Gander.
Transfield, which has Australian government contracts to run detention centres in Papua New Guinea and Nauru, changed its name to Broadspectrum after its founding family withdrew rights to use the Transfield name.
The private company Transfield Holdings, owned the Belgiorno-Nettis family, wanted to distance itself from Transfield because of the detention centre contracts.
Broadspectrum posted a statutory profit of $25 million, up from $8.4 million the year before, for the half year to December. Underlying profit of $27.9 million was up 54%.
The company has had its $1.2 billion contract running Australia’s detention centres in Nauru and Papua New Guinea extended by 12 months. It is competing with one other company for a new contract.