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Highlights
- Xref Board endorses Seek’s acquisition proposal.
- Offer price of 21.8 cents per share values Xref at A$41 million.
- Xref directors unanimously recommend shareholders approve the deal.
Australia’s leading job advertisement platform, Seek Ltd (ASX:SEK), has extended a final acquisition offer to Xref (ASX:XF1), a company specializing in employee reference check technology. This offer, valued at 21.8 cents per share, positions Xref at an approximate market valuation of A$41 million. Notably, the current market price for Xref shares recently closed at 20.5 cents per share, placing the offer slightly above the present trading value. The Board of Xref has endorsed the proposal, recommending that shareholders approve Seek’s acquisition.
On Wednesday, Xref’s shares closed at 20.5 cents, translating to a market capitalization of approximately A$37 million. Seek’s offer, therefore, represents a modest premium, valuing Xref just above its current market value. Following careful consideration, the Xref Board collectively agreed to support the deal, stating in a communication that each director would vote in favor of the Scheme. This recommendation holds unless a superior proposal surfaces or an independent expert determines that the offer is not in the best interests of Xref shareholders.
In recent statements, the Board reaffirmed their confidence in the arrangement, highlighting the strategic benefits that Seek could bring to Xref as part of a larger enterprise. Seek’s established position in the Australian job market provides a strong foundation for Xref’s growth, particularly as the demand for efficient and robust hiring solutions remains high.
The Australian job market, however, has shown mixed signals lately. While there has been sustained demand for employment services, recent data from Seek indicates a slight decline in applications per job ad, marking the first drop in two years. The decrease of 0.9% is relatively small, suggesting that overall market stability may persist. Seasonal factors, such as the influx of holiday season job openings, could influence these trends, potentially stabilizing or even reversing this dip in application rates.
By acquiring Xref, Seek aims to strengthen its offerings in recruitment technology. The combination of Seek’s extensive job advertising platform with Xref’s specialized reference-checking services presents a strategic alignment that could enhance Seek’s ability to provide comprehensive hiring solutions.
As of the last trade, Xref shares remained at 20.5 cents per share, and shareholders are anticipated to vote on the proposal soon.
