MELBOURNE, March 21 (Reuters) - Downer EDI Ltd launched a bid for Spotless Group on Tuesday valuing the cleaning and catering firm at A$1.27 billion ($981 million), in a move to expand its services beyond engineering and construction.
Downer is offering A$1.15 a share in cash for stock it does not already own in Spotless, a 59 percent premium to its close on Monday.
Downer, which acquired a 19.9 percent stake in its target in a raid late on Monday, said it would fund the deal mostly through the sale of A$1 billion worth of new shares to its existing shareholders.
“The acquisition of Spotless is a significant investment in Downer’s strategy to expand its capabilities and strengthen its position as a leading provider of services to customers in Australia and New Zealand,” Downer Chief Executive Grant Fenn said in a statement.
$1 = 1.2940 Australian dollars Reporting by Sonali Paul; Editing by Bernard Orr