Programmed gets tick for Skilled takeover

Programmed Maintenance Services’ $424 million takeover of its larger competitor Skilled Group is a step closer to fruition, after Skilled shareholders voted in favour of the scheme of arrangement today.

At a general meeting today, about 99.1 per cent of votes were cast in favour of the transaction, where by Skilled shareholders will receive 25 cents and 0.55 Programmed shares for every Skilled share they own.

Skilled shareholders will end up holding about 52.4 per cent ownership in the combined business.

“We are delighted that Skilled shareholders have recognised the rationale for combining our two businesses,” Programmed chairman Bruce Brook said.

“Together, we will be a stronger, more efficient and more competitive provider of staffing, maintenance and facility management services, diversified across all sectors of the economy.

“Combining the businesses will enable us to unlock substantial value for both Programmed and Skilled shareholders, and we will be better positioned to take advantage of growth opportunities.”

Subject to court approval, the scheme is expected to be implemented on October 16.

Programmed provides staffing, maintenance and project services across a broad range of government and private sector businesses, while Skilled leads the market in blue-collar labour hire in Australia.

Skilled’s head office in Melbourne will become an operating office, while the combined company will be based at Programmed’s headquarters in Perth.

Upon completion of the transaction, Programmed will retain its current board structure, while the Skilled board will resign, including managing director Angus McKay, who entered the job in January.

In December, Programmed proposed a cash and scrip 'merger of equals' with Skilled, valuing Skilled’s shares at $1.39 each (at the time) and the deal at about $325 million.

The deal was rejected by Skilled, with the company saying it undervalued the business, prompting Programmed to come back later with a more generous offer that was backed by the Skilled board.

Skilled shares were 0.1 per cent higher to $1.69 each, while Programmed shares rose 2.3 per cent to $2.65 just before the close of trade.