Story
IDP Education Rejects Blackstone's A$695 Million Takeover Bid
Summary
The Australian education services company turned down an unsolicited A$2.50 per-share offer from the private equity firm, calling it 'highly opportunistic' and an undervaluation of its future potential.
IDP Education (ASX:IEL) has rejected a revised, unsolicited takeover proposal from private equity giant Blackstone (NYSE:BX) valued at approximately A$694.7 million ($493.8 million), with the company's board concluding the offer substantially undervalues the business.
The Offer
Blackstone Singapore submitted the cash offer of A$2.50 per share on September 9, according to a statement from IDP Education on Tuesday. The proposal represented a significant 56% premium to IDP's closing share price on September 8.
This was an improved bid from the U.S.-based investment firm. The source material indicates it followed a previously rejected, lower proposal of A$2.30 per share.
Board Deems Bid 'Opportunistic'
The board of IDP, a co-owner of the widely used IELTS English language exam, unanimously rejected the offer. It labeled the approach as "highly opportunistic" in light of current industry challenges and the company's ongoing transformation.
AdIn a statement, the firm said the proposal failed to account for the business's future earnings potential and the "associated benefits that are yet to be realised" from its multi-year strategic program.
Market Reaction
Investors responded positively to the news of the rejection, sending shares of Melbourne-based IDP soaring 20.7% to close at A$2.16 on Tuesday. The session marked the stock's highest closing level since August 19.
According to Reuters, Blackstone did not immediately respond to a request for comment on the matter.
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