* Private equity awash with funds
* PEP looking for new opportunities
* SAI terminates CEO after four months
* SAI open to discussions with PEP
(Adds details on the deal, context)
By Byron Kaye
SYDNEY, May 26 Australian private equity firm
Pacific Equity Partners offered up to A$1.1 billion to take
standards compliance business SAI Global Ltd private,
the latest in a flurry of deal activity in the country sparked
by surging stock prices.
PEP's indicative and non-binding offer for SAI, confirmed by
both parties on Monday, follows two years of declining profits
at the former commercial arm of Australian industry standards
aggregator Standards Australia.
It also came as SAI said it terminated the contract of Chief
Executive officer Stephen Porges, who started on Jan. 20,
because of "fundamental differences of opinion between him and
Shares in SAI jumped 17 percent to $5.02 by 03.00 GMT, their
highest level in two years, but short of the range of PEP's
indicative offer range of $5.10 to $5.25.
PEP, Australia's largest private equity firm, is on the hunt
for new companies to turn around after having almost tripled the
market value of cleaner-caterer Spotless Group Ltd last
week in the country's biggest initial public offering in four
It also plans to exit paper products business SCA Hygiene
Australasia in an offer worth an estimated A$800 million as well
as Peters Ice Cream for an expected A$400 million, either by
private sale or IPO.
Globally, private equity firms are aggressively pursuing
investments having raised $95 billion in the first three months
of 2014, the most in a quarter since 2008, according to analysis
SAI's independent chairman Andrew Dutton will assume the
role of executive chairman, it said.
SAI did not say if its decision to terminate Porges'
contract was related to the takeover offer, which its board was
considering. The SAI board appointed Macquarie Capital and
Gilbert and Tobin to advise on the possible takeover.
PEP was likely to present the company with a fixed offer
price once it completed due diligence, a source familiar with
the deal told Reuters.
PEP said it was "pleased that the board has agreed to engage
with it... and looks forward to understanding from the board how
we can progress to due diligence in the interests of bringing
forward a binding proposal to SAI shareholders".
PEP engaged Citi and Allen & Overy for the takeover offer.
($1 = 1.0821 Australian Dollars)
(Reporting by Byron Kaye; Editing by Edwina Gibbs and Miral