Reuters: Private Equity: UPDATE 2-Australia's PEP sweetens offer for Spotless-sources

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UPDATE 2-Australia's PEP sweetens offer for Spotless-sources Apr 24th 2012, 03:22 Mon Apr 23, 2012 11:22pm EDT * PEP has made second offer for Spotless to consider-sources * Spotless wants deal worth at least A$743 million * Spotless-PEP talks have dragged on for 5 months (Adds comments from sources, details) MELBOURNE, April 24 (Reuters) - Pacific Equity Partners (PEP) has sweetened its takeover offer for Spotless Group , bringing the deal value above the A$743 million ($765 million) that the Australian business services company has been seeking, two sources with knowledge of the deal told Reuters. The news comes as Spotless asked for trading in its shares to be halted on Tuesday as it prepares an announcement on the status of its talks with PEP, which have dragged on for five months. PEP, Australia's largest buyout firm, has already offered A$711 million ($732 million) or A$2.68 a share for the cleaning and catering services group, whose contracts include selling meat pies at the Melbourne Cricket Ground. This offer is still on the table, the sources said. PEP has now added a second proposal, consisting of the previous offer plus a promised cash return after the sale of a non-core asset that would take the deal value above A$2.80 a share, said the sources, who declined to be named because the talks are confidential. One of the sources said the second option, which entails selling the underperforming coat hanger business Braiform, would be worth at least around A$745 million. Spotless has maintained it will not back an offer below A$743 million, or A$2.80 a share. On Monday, Spotless said PEP had finished looking at Spotless's books and had secured financing for a deal, but the two sides were still discussing a deal that could win board approval. Sources had earlier said the private equity firm had lined up over A$500 million in leveraged loans from lenders including Australia and New Zealand Banking Group, Citi, Commonwealth Bank of Australia, Credit Agricole CIB, Investec, HSBC, Mizuho Corporate Bank, National Australia Bank and Westpac Banking Corp. On Monday, shares of Spotless Group advanced 2.5 percent to A$2.46 after the firm said it was still talking with PEP. ($1 = 0.9717 Australian dollars) (Reporting by Victoria Thieberger & Narayanan Somasundaram; Editing by Chris Gallagher) Link this Share this Digg this Email Reprints

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