Genius withdraws Mayfield takeover offer, pledges to use 33% shareholding to vote against rival bids

Genius Childcare has withdrawn its $1.28 per share offer for the shares in Mayfield Childcare that it did not already own, and confirmed that it will also, as a major shareholder, reject any competing proposal made by third parties for the company. 

The move comes in the wake of Mayfield rejecting a revised offer of $1.35 a share from Genius, matching that of Busy Bees Australia, however the new Genius proposal also included exclusivity requirements which were deemed inappropriate by the Board and led to its subsequent rejection.

“Mayfield is disappointed with Genius’s current position on competing proposals given the early non-binding indicative stage of the process,” the company said in a statement.

Exclusivity requests at heart of Mayfield rejection of Genius revised offer

Genius submitted a revised conditional, non binding and indicative offer (NBIO) on 17 January 2023 which represented a five per cent premium to its original offer and matched that of Busy Bees who offered the same amount on 12 December 2022.

The revised Genius offer included two additional clauses that requested Genius receive exclusive access to Mayfield data for due diligence purposes and also required Mayfield to enter into a second confidentiality and exclusivity deed under which Mayfield would be prohibited to engage with any other suitors of a period of 60 days.

“Having considered all relevant factors in relation to the Revised NBIO including the revisited indicative offer price, the Mayfield Board determined that it was not appropriate for Mayfield to grant additional exclusivity arrangements as proposed by Genius which is a core condition of the revised offer,” the Mayfield Board said.

The Board subsequently engaged with Genius saying that despite the exclusivity clause rejections it was still prepared to engage with the group however, soon after Genius informed Mayfield of its intention to withdraw its bid.

Genius flexes shareholding muscle with refusal to accept any other competing Mayfield offers

Genius’ offer withdrawal also came with confirmation that as majority shareholder in Mayfield, with a holding of around 33 per cent, they would be rejecting any competing proposals for Mayfield shares, in a move that effectively blocks any otherproposals to acquire the group, including that of Busy Bees Australia.

It is unclear at this juncture how Genius would respond should Busy Bees, or any other potential suitors, increase the offer price for Mayfield shares.

Genius’ relationship with Mayfield began in October 2021 when it sold fourteen centres to the Group for $39.2 million of which 80 per cent of the consideration was in shares priced at $1.15 leaving Genius with its 33 per cent stake in the enlarged group.

The Mayfield board have expressed their disappointment in Genius’s position however indicated that it still continued to work with interested parties interested in a potential transaction. 

To read the Mayfield statement click here.