APM rejects CVC proposal

APM Human Services International's board has unanimously rejected a takeover bid from CVC Asia Pacific Limited, saying the offer didn't reflect the company's true value.

This news resulted in APM's share price - which had dipped to a record low of 69 cents on January 23 - rising to a high of $1.44 on Monday morning.

APM closed trade at $1.22 per share, up 47 per cent. 

APM said it had entered into discussions with CVC regarding a potential takeover, and last Friday received a conditional and non-binding indicative proposal, whereby CVC would acquire all of its shares by way of a scheme of arrangement.

However, the company said CVC's offer of $1.60 per share for the consideration - well below its initial $3.55 float price - wouldn't be pursued.

"Although APM is currently operating in a challenging environment at a historic low point of the unemployment cycle, the board remains confident in the outlook for the company," APM said.

A Perth-based human services entity, APM specialises in health and disability employment services. Its share price fell sharply on January 17, following an announcement that underlying net profit after tax for the first half of the 2024 financial year was down 35.5 per cent, from $85.5 million to $55 million.

This was despite revenue increasing to $1.14 billion. 

For APM shareholders, this was the second significant share price drop in the space of three months, as a similar fall occurred following last November's AGM, where shareholders were forewarned to expect a lower-than-expected performance, primarily due to unemployment levels in Australia and the UK. 

A day later, following a further drop of 40 per cent, the net wealth of executive chair Megan Wynne and her husband, Bruce Bellinge, shrunk to $244 million from approximately $1.11 billion, based on their holding at listing at the IPO offer price.

"APM remains focused on supporting our people, continuing to deliver the highest-quality services globally for our clients and stakeholders, and executing on our strategy," Ms Wynne told the market. 

"The board and I have full confidence in APM’s management team to deliver long-term value to our shareholders. I am confident in the outlook for APM.”

The company said it has appointed Gilbert+Tobin and UBS Securities Australia as its legal and financial advisers respectively, and reiterated that its shareholders didn't need to take any action in regard to CVC's proposal.