Shares of Australia’s IDP Education rose more than 16% on Wednesday after the IELTS English language exam co-owner said it was weighing a sweetened takeover proposal from Blackstone valuing it at about A$833.7 million ($573.34 million).
The A$3-per-share proposal represents a 20% premium to Blackstone’s previous offer and is well above the A$2.04 median analyst price target compiled by LSEG. Even so, IDP’s shares continued to trade below the latest offer price.
The proposal is Blackstone’s third approach for the company. IDP previously rejected offers of A$2.30 and A$2.50 per share, saying they undervalued the company and were made at a “highly opportunistic” time.
IDP said its board has not yet decided whether to support the non-binding proposal and cautioned there is no certainty a transaction will proceed. Blackstone declined to comment.
The sweetened bid is “enough to start a conversation and probably to open the books, but not enough for a recommendation,” David Tuckwell, chief investment officer at ETF Shares, told Reuters.
“Blackstone is buying a market-leading global platform at a cyclical low,” Tuckwell said, adding that IDP’s co-ownership of IELTS makes it a scarce and cash-generative asset.
IDP co-owns IELTS with the British Council and Cambridge University Press & Assessment and places students at universities in Australia, Britain, the United States, Canada, New Zealand and Ireland.
Blackstone’s approach comes after a sharp downturn in the international education sector. In August, IDP reported a nearly 75% fall in annual statutory net profit and forecast weaker fiscal 2027 operating earnings.
IDP shares closed 16.3% higher at A$2.57, marking their highest since late June and best day since September 22.
The stock hit a record low in September and has lost about 55% so far this year despite Wednesday’s surge.
($1 = 1.4541 Australian dollars)
Reuters
