The company advised the ASX today it had “received a highly conditional non-binding indicative offer for the purchase of PMP in a range between 68 to 78 cents per share”.
The print giant, which is Australia’s 278th largest company, ended trading yesterday with a share price of 25 cents, which would value it at $81 million.
PMP said it was considering the offer and would keep the market informed of developments.
The offer comes three days after PMP downgraded its earnings forecast and announced an expansion of its cost cutting program.
PMP predicted earnings before interest and tax (EBIT) and before significant items of $30-33 million.
PMP had predicted an EBIT of $56.7 million at its annual general meeting in November, before downgrading that to $43-47 million in February.
The company said: “Since PMP’s last market guidance in February market conditions have continued to deteriorate.”
March results were about 20% below forecast, PMP added, while the fourth quarter forecast showed “lower than expected volumes due to further deterioration in demand from the retail and publishing markets.
“It is evident this is a combination of structural issues, economic drivers and deferral of advertising spend into the first quarter of fiscal 2013.”
PMP said the gloomier forecast meant there would have to be an expansion of the cost cutting foreshadowed in its half-yearly results.
Meanwhile, Peter George has resigned from the board and been appointed chief operating officer to “assist with the acceleration of the transformation of the Australian print business”.
The leadership restructure follows the recent sacking of Andrew Williams, the former executive general manager of print and distribution.
Chief executive Richard Allely told ProPrint at the time that the move was designed to give him a more direct influence on print and distribution – the largest part of PMP’s business.
“It says to customers that we’re about driving the business to become the lowest-cost producer and to remove as many layers as possible so we get closer to clients and much closer to the operations,” he said.
George will now be closely assisting Allely in that transformation.
Allely said he was delighted with George’s appointment, “particularly given his previous experience as interim head of print in 2009 and his considerable professional experience in managing major business change programs”.
Chairman Ian Fraser could not be reached for comment.
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