Downer's new Spotless shares cross, now for the raising

Downer CEO Grant Fenn is making a move on Spotless Group

Downer CEO Grant Fenn is making a move on Spotless Group

Downer EDI is reported to be in the market for shares in Spotless Group ahead of launching a $1.3 billion bid for the services contractor.

It is offering $1.15 a share in cash, a significant premium to the target's last traded share price of 72.5c.

Spotless provides services including cleaning, waste management, catering and maintenance for clients such as sporting stadiums, hospitals and aged care homes.

Grant Fenn, Downer's chief executive officer, said the acquisition of Spotless was an investment in the company's strategy to expand its capabilities and strengthen its position as a leading service provider.

The trade represented a 14.9 per cent stake in Spotless which, when added to Downer's existing 5 per cent economic interest, takes its stake to 19.9 per cent.

"These include a blue-chip customer base and a strong portfolio of long-term government, health, defence, and public-private partnership (PPP) contracts, as well as operating the largest commercial laundry business in Australian and New Zealand", Hounsell said.

The offer will need to achieve at least 90 per cent shareholder support and regulatory approval to proceed.