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Sydney-based Quickstep Holdings (ASX: QHL), Australia's leading independent aerospace engineering, manufacturing and aftermarket services company, has given an early snub to a $28 million takeover offer from ASDAM Operations, a defence customer owned by funds managed by CPE Capital.
Yesterday it was revealed that ASDAM intended to acquire Quickstep for $0.40 in an off-market takeover - a 105 per cent premium to the previous day's closing price, but still short of a $0.43 per share scheme offer it claims was made previously that is also on the table.
The company did not state when the previous offer was received, and interim CEO Demi Stefanova declined to clarify the matter.
The board has reached the preliminary view that the off-market takeover offer "does not adequately reflect the value for the company", but has enlisted Miles Advisory Partners and Maddocks to help consider the offer and evaluate its implications for shareholders.
Based on the findings of these considerations, the board will then issue a formal recommendation to shareholders.
"The board remains open to continuing constructive discussions with ADSAM [sic] in respect of a control transaction," the company stated.
"At this time, there is no need for shareholders to take any action in relation to the offer or any documents that shareholders may receive from ADSAM [sic]."
The bid happened to coincide with another announcement yesterday that Quickstep had renewed several major contracts with key Tier 1 defence customers including Lockheed Martin, Northrop Grumman, and ASDAM affiliate Marand.
It also coincides with a period of flux for Quickstep, which in July completed a major restructuring of its aerospace structures business in Bankstown with its production head count cut by 20 per cent.
Longstanding CEO Mark Burgess also left the company in October in light of strategic changes for the group as it grapples with the fallout of a sudden reduction in demand over the past 18 months, and has been plotting the path to improved profitability.
Burgess' shoes have been filled by interim CEO Demi Stefanova, who has been with the company since 2022, was promoted to chief operating officer last year, and was leading the restructure initiative in Bankstown.
The takeover bid also comes around two weeks after Quickstep had to bite the bullet on its Quickstep Aerospace Services (QAS), a maintenance, repair and overhaul operation based in Tullamarine, Victoria. Quickstep announced a sale process for QAS in August, but on 23 October revealed that no offer had been received.
The company reported that customer orders for QAS had declined since July, accelerating its losses and prompting a decision to close the business and dispose of its assets.
"This decision has not been taken lightly given the loss of a unique Australian capability, however the mitigation of the losses associated with this MRO business supports the sharpening of our strategy and our focus on the long-term sustainable and profitable performance of the core Quickstep business," the company stated at the time.
"The company is working closely with all impacted employees, customers and partners to ensure a smooth transition during this period of change.
The group, which reported a 5.3 per cent increase in total revenue to $99.3 million in FY24, and saw its net profit before tax rise 30 per cent to $1.3 million, sought to ameliorate news of the QAS closure with encouraging signs from other parts of the business.
"In terms of this focus, we are pleased to advise that following the restructure of our Bankstown Structures business earlier this year, its performance continues to exceed last year’s results in line with the company’s revised strategy," Quickstep reported.
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