Funerals group Propel says buyout offers too cheap
Australia’s second-largest funerals business, Propel Funeral Partners, has received “multiple” buyout proposals, but its board says none were compelling enough to start talks with any potential suitors.
Propel operates from 183 locations in Australia and New Zealand and owns a range of businesses with a strong presence in their local areas including Ross Funerals, Alfred James Funerals, Berry Funeral Directors, Millingtons, F.W Barnes & Son, and Gympie Funerals.
The Australian Financial Review’s Street Talk column revealed on Sunday night that IFM Investors, led by Stuart Wardman-Browne, who set up its private equity unit seven years ago, had looked closely at Propel.
Propel Funeral Partners is Australia’s No.2 player in funerals and cremations and listed on the ASX in 2017.
Propel listed on the ASX in 2017. The overtures come as InvoCare, the country’s biggest funerals and crematoria business, is set to quit the ASX as shareholders prepare to vote on a $1.8 billion offer from private equity group TPG at a scheme meeting on October 31.
Propel told the ASX on Monday it “received inbound interest regarding a potential change of control transaction from multiple parties”.
These were “unsolicited, preliminary, highly conditional and non-binding” proposals.
“The board has determined the interest received to date has not been compelling and has therefore elected not to engage with any party regarding its interest.”
Ed Prendergast, a portfolio manager with the Pengana Emerging Companies Fund, said there was strong long-term upside for Propel because it had a market share of about 6 per cent in a sector where it would be able to expand steadily through sensible acquisitions. Pengana was an investor in the group for many of the
Read more on afr.com
