APM share price grinds to a halt as investors await update on takeover offer

The international employment services company says it will update shareholders on the MDP takeover offer shortly.

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The APM Human Services International Ltd (ASX: APM) share price is frozen today after the company went into a trading halt prior to the market open.

The international employment services company requested the trading halt pending the release of an update on the non-binding takeover offer it received from Madison Dearborn Partners last month.

APM asked for the trading halt to remain in place until it released an announcement or until the commencement of trading next Tuesday 4 June.

The APM share price closed yesterday's session at $1.25. APM shares are down 0.79% in the year to date and down 39.6% over the past 12 months.

Let's find out what's happening with that takeover offer.

APM share price frozen as investors await news

Last month, APM received a "disappointing offer" of $1.40 per share from United States private equity firm Madison Dearborn Capital Partners (MDP).

MDP already owns 29% of the company and has three directors on the APM board.

The offer was well below an earlier conditional, indicative, non-binding takeover offer of $2 cash per share received from CVC Asia Pacific in February.

CVC originally offered $1.60 per share but revised it upwards. On this basis, APM granted CVC access to its books to undertake due diligence.

However, after CVC completed its due diligence in March, it advised APM it did not want to proceed.

After the CVC deal collapsed, Madison Dearborn put forward its own indicative non-binding offer to buy all the shares it did not own for $1.40 per share via a scheme of arrangement.

That was back on 8 April.

The offer on the table

The proposal included a rollover election for APM shareholders to receive all or part of the
consideration in unlisted shares in MDP.

It also required certain shareholders, including executive chair Megan Wynne and key management personnel, to elect to receive all of their consideration in scrip.

MDP requested a period of due diligence on a non-exclusive basis to finalise its debt financing.

APM told investors it intended to engage with MDP and any other suitors on the horizon.

To this end, it set up an Independent Board Committee (IBC) comprising four independent board directors to lead the negotiations with MDP and any other parties.

The IBC chair, Nev Power, described the $1.40 offer as "disappointing" and said the IBC would strive to achieve "an outcome that is fair and reasonable and in the best interests of all shareholders".

And that brings us up to date.

Investors haven't heard anything further about the deal until today's trading halt request.

But it appears APM will have some news for the market very soon.

APM share price snapshot

The APM share price has fluctuated enormously this year.

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

The price went lower to 68 cents on 23 January. This remains the stock's 52-week low.

On 19 February, the APM share price leapt 48.2% after news broke of CVC's original $1.60 per share offer.

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

APM shares went into a trading halt on 27 March upon news that CVC was walking away.

The company then requested a voluntary suspension from trading and told the market it was in discussions with other parties.

On 8 April, it announced MDP's offer and was reinstated to trading.

Investors were displeased with the substantially lower per-share price offered compared to the CVC deal, and the APM share price tanked 29.4% to close at $1.15 per share.

APM shares were listed in November 2021 at $3.55. As the chart below shows, it's been a tough road for investors ever since.

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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