Engineering company Downer EDI has launched a $1.26 billion takeover offer for catering and contracting group, Spotless.
That is a substantial premium over the 72.5 cents Spotless shares were selling at yesterday The $1.2 billion price is 50% above the company's market capital of $799 million at last night's close.
The purchase would be followed by a full takeover bid to be announced tomorrow, it says.
Spotless provides services to a variety of industries, including mining and oil and gas, where it delivers facility maintenance, catering, waste management, cleaning, security and more.
An nearly $190 million parcel of Spotless Group crossed early on Tuesday morning, showing the spoils of last night's raid by Downer EDI.
Shares in the company have fallen from 95¢ just three weeks ago.
Analysts said the rumoured bid came as investment bank, UBS had grabbed up to 15% of Spotless's issued shares.
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.
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