The move follows Embark emerging as a substantial holder of Mayfield shares in late October, when it informed the ASX that it had acquired a 19.9% stake in Mayfield – the highest level of shares it could own before having to launch a full bid.

Mayfield said at the time that it "welcomes Embark's investment as a positive recognition of the company's performance potential''.

Strength via consolidation

Embark said in a statement to the ASX on Friday that it intended to launch an off-market takeover bid for the shares in Mayfield it did not own at a price of 50 cents per share, valuing the company at $37.7 million.

Mayfield shares closed at 46.5 cents on Thursday. Embark said bringing the two companies together made strategic sense.

The company said in its statement on Friday:

The successful completion of this offer will lead to a larger company (39 centres to 84 centres) with more resources to satisfy the prime aims of both Mayfield and Embark – improved educational and care outcomes for the children within our care whilst ensuring financial robustness.

Embark said further information would be provided in a bidder's statement, which would be prepared by late November.

For the bid to succeed, Embark will need to gain control over at least 90% of Mayfield shares.

An analysis of the Mayfield share register shows that, including the shares owned by Embark, the top 20 shareholders own 88.05% of the company.

Embark will therefore need to win over major shareholders, such as the owner of the second-largest tranche of shares, the Riversdale Road Group, which owns a 13.3% stake, and a number of entities, including Citicorp Nominees with an 8.2% stake and Finexia Wealth with a 6.7% stake.

In recent days, UBS Wealth also emerged as a significant shareholder with a 10.5% stake.

Performing well

Mayfield recently issued a quarterly update to the ASX, indicating that revenue had increased from $22.5 million to $23.7 million quarter on quarter, while its margin increased from 10% to 11% due to cost controls.

Embark, in its half-yearly results announced in August, stated that revenue from ordinary activities increased by 43.5% to $49.4 million, while net profit rose 62.2% to $4 million.

The company also announced a fully-franked dividend of 1.5 cents per share. Embark was valued at $120.2 million at the close of trading on Thursday, with its shares changing hands for $0.65.

The post Takeover bid launched for childcare operator appeared first on The Motley Fool Australia.

Meanwhile, the broader market is in the red today. The All Ordinaries Index (ASX: XAO) is down 0.6% at the time of writing while the S&P/ASX 200 Index (ASX: XJO) has slumped 0.66%.

So, without further ado, let's take a look at the ASX shares soaring on merger and acquisition activity on Friday.

3 ASX shares taking off on takeover attention

First off the bat, the Bigtincan Holdings Ltd (ASX: BTH) share price is soaring 12.5% to 76.5 cents right now after the company announced it's received a takeover bid.

SQN Investors has offered 80 cents per share to snap up the AI-powered sales enablement automation platform provider. So far, the company hasn't accepted the proposal. It also noted SQN Investors isn't the only suitor to have shown its acquisition interest recently.

Joining Bigtincan in the takeover frenzy is Mayfield Childcare Ltd (ASX: MFD). The ASX education share is surging 25.9% to $1.215 on the back of its own takeover offer.

Its largest shareholder Genius Education Holdings has put forward a $1.28 per share bid.

Like Bigtincan, Mayfield Childcare will consider Genius Education's bid against other, albeit lower and more conditional, proposals to maximise shareholder value. In the meantime, however, it has granted its major shareholder exclusive due diligence.

Finally, today brought more news of the ongoing battle for control of Warrego Energy Ltd (ASX: WGO). Shares in the ASX gas explorer are to lifting 9.6% to trade at 28.5 cents right now.

Today, ASX 200 oil giant Beach Energy Ltd (ASX: BPT) upped its previous 20-cent per share bid for the company to 25 cents per share, plus any proceeds from the sale of Warrego's Spanish assets.

Its improved offer comes after it was outbid by Gina Rinehart's Hancock Prospecting. Hancock offered Warrego investors 23 cents per share earlier this week.

No doubt, all eyes will be on the ASX takeover targets and their share prices in the coming weeks to see how the three acquisition offers progress.

The post 3 ASX shares soaring on takeover bids today appeared first on The Motley Fool Australia.

That is the ASX-listed childcare space. Operators could see a boost to demand under an Anthony Albanese government, according to Canaccord Genuity.

Why this ASX sector is outperforming today

This probably explains why the Mayfield Childcare Ltd (ASX: MFD) share price surged 9.6% to a record high of $1.49.

The G8 Education Ltd (ASX: GEM) and Evolve Education Group Ltd (ASX: EVO) share prices are also beating the market. They are up 3.5% to $1.19 and 0.7% to $0.70, respectively, at the time of writing.

In contrast, the S&P/ASX 200 Index (ASX: XJO) lost its morning gain to trade at breakeven.

Undervalued ASX sector getting a Labor boost

Canaccord said:

The election result over the weekend should be positive for childcare demand, in our view, with childcare being one of the key policies put forward by the Labor party.

The policy is aimed at making childcare more affordable by increasing the percentage of fees covered by the government.

The new federal government plans to increase the maximum childcare subsidy to 90%. It will also increase the subsidy rate for one child in every family and households with incomes up to $530,000.

Additionally, Labor will ask the competition watchdog to design a price regulation mechanism and ask the Productivity Commission to look at ways of moving to a 90% flat subsidy for everyone.

Demand outpacing supply

Albanese is promising that around 96% of families will be better off under its plan and no family will be worse off.

It's worth noting that demand for childcare was already growing strongly before any policy changes were announced.

Canaccord added:

We believe these [policy] changes will have a meaningful impact on demand in MarQ'22 and beyond.

Meanwhile, new supply has come on but not at the rates we have seen previously. Moreover, there has been an increase in closures.

Which ASX childcare shares to buy

But not all shares in this undervalued ASX sector are a buy, according to Canaccord.

The broker is recommending investors buy G8 shares and Mayfield Childcare shares. These shares are trading on attractive valuations and Canaccord is expecting them to post solid earnings growth in 2022.

Its 12-month price target on G8 is $1.42 a share and on Mayfield Childcare is $1.76 a share.

Canaccord is more cautious about the Evolve Education share price. While it looks cheap on a long-term basis, the broker is concerned about the performance of its New Zealand operations.

The broker rates Evolve Education as a hold with a price target of NZ$0.90 a share.

The post Broker reveals undervalued ASX sector with post-election tailwinds appeared first on The Motley Fool Australia.