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Aussie detention center operator agrees Spanish takeover offer amid PNG uncertainty

Xinhua, April 29, 2016 Adjust font size:

The operator of Australia's controversial offshore detention centers Broadspectrum Ltd has reversed its position to accept a 769-million-Australian dollar takeover offer after Papua New Guinea (PNG) deemed its local processing center unconstitutional.

Broadspectrum had urged shareholders to reject a revised bid by Spanish infrastructure giant Ferrovial SA in early April, but said the PNG decision had increased uncertainty over its contract with the Australian government, and therefore future earnings.

The center Broadspectrum operates on behalf of the Australian and PNG governments was deemed unconstitutional by the PNG Supreme Court earlier this week.

Subsequently the Pacific nation's Prime Minister Peter O'Neill vowed to close the center, however he is at loggerheads with Australian officials who maintain asylum seekers housed at Manus won't be processed or resettled in Australia.

The episode "has increased the level of near-term uncertainty to its contract with the Department of Immigration and Border Protection, and future earnings that may be derived from it," Broadspectrum said in a statement early Friday.

Noting that the Ferrovial offer expires on May 2, Broadspectrum said "it is unlikely the company will have certainty as to the potential impacts before the current scheduled closing date."

Australian officials are preparing to travel to PNG next week for extended negotiations over the center's, and asylum seeker's future.

Broadspectrum's shares bounced in early trade on Friday after exiting a trading halt while the company reviewed its options, up 36 Australian cents (27.51 U.S. cents), or 32.14 percent to 1.48 Australian dollars (1.13 U.S. dollars) by 1155 local time (AEST).

Ferrovial's bid values the company at 1.50 Australian dollars per share (1.15 U.S. dollars), or 769 million Australian dollars (587.46 million U.S. dollars).

Ferrovial on Friday welcomed the change of recommendation but would not raise the bid or extend the offer's deadline. Endit