APM shares rocket 73% after rejecting $1.5b takeover

$1.5 billion wasn't enough for this company's board.

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APM Human Services International Ltd (ASX: APM) shares are rocketing on Monday.

At one stage today, the human services provider's shares were up as much as 73% to $1.44.

They have since pulled back a touch but remain up 53% to $1.27 at the time of writing.

Why are APM shares rocketing?

Investors have been scrambling to buy the company's shares this morning after it confirmed that it has received a takeover approach.

According to the release, the company has been in discussions with CVC Asia Pacific and received a conditional and non-binding indicative proposal on Friday.

CVC has offered to acquire APM by way of a scheme of arrangement for $1.60 per share. This represents a 93% premium to its last close price and values the company at approximately $1.5 billion.

The release notes that the proposal was received following a period of engagement between APM and CVC, including the provision of information and due diligence under the terms of a non-disclosure agreement.

Thanks but no thanks

Despite the significant premium on offer with this proposal, the APM board has unanimously decided to reject it.

They believe the proposal does not sufficiently reflect the fundamental value of APM and the potential of its market leading platform globally.

The board also highlights that although APM is currently operating in a challenging environment at a historic low point of the unemployment cycle, they are confident in the company's outlook.

APM's executive chair, Ms Megan Wynne, said:

APM remains focused on supporting our people, continuing to deliver the highest-quality services globally for our clients and stakeholders, and executing on our strategy. The Board and I have full confidence in APM's management team to deliver long-term value to our shareholders. I am confident in the outlook for APM.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended APM Human Services International. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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