Allied's board of directors has rejected a takeover bid from minority shareholder, Nightingale Partners, claiming the conditions of the deal are unrealistic.
In a statement to the ASX on Monday, directors recommended shareholders take no action in relation to the offer. In the meantime, the board has enlisted financial advisory firm, Grant Thornton Corporate Finance, to evaluate and respond formally.
"While we welcome Nightingale's continued financial interest in Allied, we believe the nature of the proposed offer to be opportunistic, inadequate and highly conditional," directors said in a statement. "It is structured such that existing Allied shareholders will become minority shareholders in a company controlled by Nightingale. The ... proposed offer provides no guidance regarding their strategy or their future business intentions apart from opposition to the merger with LongReach."
On August 30, Nightingale submitted a proposal to acquire a 50.1 per cent hold on the ASX-listed service provider's capital. The offer was based on Nightingale paying at least 18 cents per share for 60 per cent of shareholder interest.
At the time, Nightingale director, Larry Case, told ARN the bid was lodged in an attempt to stop Allied's merger with LongReach. He claimed the LongReach deal was a negative step which was unlikely to strengthen Allied's position in the market. The merger, first announced in June, is scheduled to be completed in September.
Allied's directors said its company memorandum on the LongReach merger was expected to be lodged with the Australian Securities and Investment Commission next week.