“The board is united in its view that the proposal… does not warrant proceeding to due diligence”
In a statement released 12 November, Navitas announced the offered price of $5.50 cash per share, which it received in an unsolicited proposal on 9 October, did not meet the medium and long-term potential of the company.
“The board believes it has given the BGH Consortium every opportunity to put forward a proposal which the board could support, having regard to the best interests of Navitas and all its shareholders,” said Navitas chairman Tracey Horton.
“The board is united in its view that the proposal the BGH Consortium has put forward does not warrant proceeding to due diligence.”
In its statement, the Navitas board highlighted strategies and plans that forecast earnings of $200 million by the 2021 financial year and a target of more than $250 million by the 2023 fiscal year.
The decision comes after a month of discussions between the two groups, a period which saw Jones agree with a request from the Navitas board to retire from his position as a director after he made public comments to The West Australian newspaper.
“While Mr Jones has delivered a signed set of insider protocols, they have not been agreed with the board and do not reflect what the Board believes are reasonable and necessary,” Navitas Group wrote in a 29 October ASX statement.
In the rejection statement, Navitas also announced it was currently exploring alternative takeover proposals with other parties. Consequently, Jones, who requested to be reinstated as a non-executive director if the BGH proposal did not proceed, remains off the board due to an agreement which binds him and fellow consortium member AustralianSuper to vote against any competing bids.
“A number of these parties have confirmed the board’s view that the commitments by AustralianSuper and Mr Jones are potentially an impediment to proceeding with any competing proposal,” the statement reads.
According to Navitas’ statement, vice-chancellors from its partner universities also expressed concerns the bid would create instability within the organisation, at its recent business partners conference.
While the board has rejected the takeover proposal, the BGH Consortium can still attempt a takeover via a buyout proposal directly to Navitas shareholders.