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Spanish firm launches takeover bid for Australian immigration detention provider

Xinhua, December 7, 2015 Adjust font size:

Australian immigration detention provider Broadspectrum Ltd's shares have surged 50 percent on Monday after a Spanish infrastructure giant initiated a 715 million Australian dollar (524.01 U.S. dollar) take over bid, a little over half the value the company rejected a year ago.

The company formally known as Transfield Services Ltd knocked back Spanish giant Ferrovial SA's 2.00 Australian dollar (1.47 U.S. dollar) per share offer a year ago.

However, the company has taken a second bite with an all cash offer of 1.35 Australian dollars (99 U.S. cents) per share after Broadspectrum's price share price over the past year has halved.

Broadspectrum had been implementing a highly controversial diversification strategy out of mining services and into Australia's immigration detention program which saw several high profile shareholders to quit amid human rights concerns.

Ferrovial's offer is a 59 percent premium on Broadspectrum's last closing price of 85 Australian cents (62 U.S. cents) per share on Friday.

"Our offer provides Broadspectrum shareholders the certainty of cash consideration, eliminating the risks associated with the near term outlook in Broadspectrum shares," Ferrovial chief executive Santiago Olivares said.

The company is currently in closed negotiations for a new five-year contract to operate Australia's Nauru and Papua New Guinea detention centers after already being named the preferred bidder on Aug. 31.

At 1259 local time (AEDT) Broadspectrum's share price had surged 48.57 percent, or 41 Australian cents (30 U.S. cents) to 1.26 Australian dollars (92 U.S. cents), slightly down from 1.31 Australian dollars (96 U.S. cents) it surged to on the news.

Ferrovial's offer is contingent on gaining majority shareholdings in the offer as well as approval from Australia's Foreign Investment Review Board (FIRB).

The Madrid-listed global infrastructure and services company employs 69,000 people in 25 countries and operates, among others, London's Docklands light railway that connects Canary Wharf to the city as well as a waste treatment plant in southern England. Endit