Last-minute rival bid halts takeover of Julia Ross’ recruitment company

RHS shareholders were due to vote on the Peoplebank bid – which values RHD shares at 70c – at 11am yesterday, but just hours before the meeting, RHD chairman Allan McDonald revealed to the market Chandler Macleod had expressed interest in bidding for the company, with an indicative price of 73c a share.

While the Chandler Macleod offer is not a formal bid, shareholders have decided to allow Chandler two weeks to perform due diligence on RHD. Chandler was prevented from performing due diligence previously because RHD was locked in an exclusivity period with Peoplebank.

The Chandler Macleod has been backed by wealthy entrepreneur Jack Cowin, who is best known as the owner of the Hungry Jack's brand in Australia but is also the second largest shareholder in RHD.

Cowin had been unhappy with the Peoplebank bid, and while there was some speculation he may launch a bid of his own, he has told the Australian Financial Review that he is pleased to be working with Chandler Macleod.

"We have been working with Chandler Macleod, so we will see what comes," he told the paper.

Chandler Macleod and Cowin have also been holding talks with Julia Ross, a leading female entrepreneur and the company's largest shareholder, with a 44.59% stake.

Ross and the rest of the RHD board had backed the Peoplebank bid, despite an independent export's report showing the bid slightly undervalued the company, which is enjoying a strong start to the 2010-11 financial year.

If Chandler Macleod does make a bid at 73c, Ross' stake would be worth $27.2 million.

Under the current Peoplebank offer at 70c, her stake is worth $26.1 million.

At this stage, a new meeting to vote on the Peoplebank offer will be held on November 25.

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written by Mike Williams, November 22, 2010

Another great example of how creating more than one bid for your company can increase its value. But there is a limit to how far other bidders will go. One would suggest that given the 4% increase in value by Chandler Macleod over the Peoplebank bid, the offer is getting close to the upper limit of the RHD. Knowing the expected upper boundary for a bid is important in managing a commercial strategy when selling a business.

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written by Albert Wong, November 26, 2010

It would also be interesting to understand the reasons behind the bidders' keen interest in RHD. Clearly, the employment market in Australia is still strong and this intense bidding may be an indication of sentiments about future market.