The Think Childcare (ASX: TNK) share price is up more than 4% today after receiving a buyout offer from a private equity group.
The post Think Childcare (ASX:TNK) share price lifts 4% on buyout offer appeared first on Motley Fool Australia. –
Think Childcare Ltd (ASX: TNK) advised the ASX today that it has received a non-binding and indicative buyout proposal from private equity group, Alceon Group Pty Ltd. The offer is for 100% of Think Childcare’s shares, and the indicative offer price currently stands at $1.351 – a premium on the current share price of $1.31.
The Think Childcare share price opened today at $1.31, up by 4.8%, after the announcement.
More details about the offer
Alceon Private Equity has indicated it is willing to offer all cash, or a combination of cash and unlisted shares in a newly incorporated holding company.
Think Childcare has granted Alceon a period of exclusivity until 18 December 2020 to complete its due diligence process. The company says the transaction is subject to various conditions such as regulatory as well as shareholder approval. As such, it has requested its shareholders not to take any action at this time.
What is Think Childcare and why might it sell the business?
Think Childcare owns and operates childcare facilities in Australia. It focuses on operating its 30 long day childcare facilities for children between the ages of 6 months and 6 years old.
The company has faced difficulties this year as coronavirus lockdown restrictions also closed down many of its childcare centres. As a result, the company is under pressure to service its debts. The latest balance sheet data for 30 June shows that Think Childcare has $35.8m liabilities that are due within a year, and $211.9m in the year following.
Although Think Childcare holds $11.8m in cash and has $8.48m of receivables due within 12 months, the much larger liabilities figure is casting a towering shadow over its liquidity and current market cap of just $76 million.
Think Childcare share price performance
As mentioned, childcare centres were among the first businesses shut down by the government when the pandemic struck. The Think Childare’s share price went from $1.41 at the start of 2020 to 60 cents by the end of March, at the height of the restrictions. The share price has since regained much of its value. It is trading up 4% at $1.30 at the time of writing.
Man who said buy Kogan shares at $3.63 says buy these 3 ASX stocks now
When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
In this FREE STOCK REPORT, Scott just revealed what he believes are the 3 ASX stocks for the post COVID world that investors should buy right now while they still can. These stocks are trading at dirt-cheap prices and Scott thinks these could really go gangbusters as we move into ‘the new normal’.
*Returns as of 6/8/2020
- Damstra (ASX:DTC) share price storms higher on AGM update
- Why does the Afterpay (ASX:APT) share price continue to outperform Zip (ASX:Z1P)?
- 2 top ASX healthcare shares that could be market beaters
- Afterpay (ASX:APT) share price lower after responding to ASIC report
- Here’s what big brokers think about the Commonwealth Bank (ASX:CBA) share price
Motley Fool contributor Eddy Sunarto has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.