APM share price freeze extended amid new takeover bid

A new suitor is pursuing the international employment services company.

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The APM Human Services International Ltd (ASX: APM) share price will remain suspended until Monday after the company revealed it is expecting a fresh takeover offer from a new suitor this evening.

This follows last week's revelations that CVC Asia Pacific was walking away from its revised takeover bid to acquire APM for a price of $2 per share.

The employment and health services provider had granted CVC a four-week exclusivity period until 27 March with the offer conditional on several factors including due diligence and debt financing.

The APM share price has been frozen at $1.63 since last Wednesday when the exclusivity period ended.

APM requested a trading halt and advised investors of "the receipt of a letter from CVC advising that they are unable to proceed to finalise a transaction on terms consistent with their non-binding Offer as disclosed to the ASX on 28 February 2024, and the ending of CVC's exclusivity period".

APM asked for the trading halt to remain in place until it released an update or until the commencement of trading on Tuesday this week.

A new suitor comes to the party…

Since then, a new potential buyer has surfaced.

On Tuesday, the company asked the ASX for a voluntary suspension of trading and advised it had "received approaches from parties to assess the potential for a transaction".

APM said those discussions were continuing and a suspension was therefore appropriate until it could release an update, or until the start of trading today.

Before the market open this morning, APM asked the ASX to extend the suspension until Monday.

It explained that it had received a letter from United States private equity firm Madison Dearborn Capital Partners (MDP).

The letter states MDP's intention to submit a non-binding indicative offer (NBIO) to acquire 100% of APM shares.

APM is expecting to receive MDP's NBIO this evening and needs time to "consider the terms of the NBIO and disclose those terms to the ASX …".

What's next for the APM share price?

If things go to plan, we'll find out at the commencement of trading on Monday.

Presumably by then, we will have an update from APM on the NBIO and the potential price on offer to buy up all its shares.

The APM share price has been on a rollercoaster this year.

Overall, it's up 29.4%. But it's been a bumpy ride.

On 18 January, APM stock plummeted by just over 40% to a new all-time low at the time of 79 cents after the company released its 1H FY24 trading update.

The price fell further to a new low of 68 cents on 23 January.

The next month, everything changed.

On 19 February, the APM share price leapt 48.2% after press speculation led to the company confirming it was in discussions with CVC. At the time, CVC was offering $1.60 per share.

The APM share price moved 13.5% higher on 28 February when CVC upped its offer to $2 per share.

That same day, APM released its 1H FY24 results.

APM reported a 31% lift in revenue to $1,116.8 million but a 12% decline in underlying EBITDA to $147.8 million. Its statutory net profit after tax and amortisation (NPATA) plummeted 41% to $43.6 million.

The company cited ongoing low unemployment and higher interest rates as drags on its business.

APM shares were listed in November 2021 at a share price of $3.55.

Motley Fool contributor Bronwyn Allen 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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