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Who's made a bid for ASG Group?

Who's made a bid for ASG Group?

ASG receives a non-binding takeover offer from an undisclosed entity for about 172 million shares

ASG Group (ASX: ASZ) has received an indicative, non-binding and conditional proposal from a “significant participant in the IT services" market for $1.03 share, according to a filing with the Australian Stock Exchange.

ASG has about 172 million shares outstanding, which will make the offer worth about $177 million excluding debt. Details of the entity that made the offer were not disclosed.

ASG is in discussions regarding the proposal and has provided limited due diligence information in relation to the offer. There is no guarantee that a binding proposal will emerge form the offer, the company said in the filing.

The company also announced a new entitlement offer to raise about $15.4 million to reduce its debt and for working capital needs. It announced a 1 for 6 accelerated non-renounceable pro-rata entitlement offer of 29.5 million new fully paid ordinary shares. The offer is being underwritten by UBS.

ASG board has said it is confident in securing new business given strategic investments in Cloud services and recent success in contract wins. It expects its revenue growth in FY 2013 to exceed 15 per cent.

In September, ASG announced it had hired UBS to conduct a strategic review for the company in light of its recent depressed share price trading and strategic developments in the Australian IT services space.

In an earlier filing, ASG said it may consider a sale and lease back of its datacentre facilities to boost its balance sheet flexibility.

ASG is a provider of IT business solutions including management and consulting services, business intelligence among other services.

Its share price last closed at $0.67 a share, down from a peak of $0.94 in May this year. It currently has a market capitalisation of about $116.2 million.

ASG said it has $363 million in active opportunities of new contracts and renewals, which includes about $123 million in Cloud services. Its Cloud services business is up 14 per cent from June 30, 2012. About $85 million of the active opportunities are classified as being, short-listed, due diligence or final negotiations.

For FY12, the company posted $150.3 million in revenue down slightly from about $153.3 million from the previous financial year. Its earnings before interests, taxes, depreciation or amortisation, or EBITDA was up 2 per cent to about $29 million from $28.1 million.


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