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Highlights

  • Johns Lyng Group shares surged 18% to AUD 3.01 after confirming it is the subject of a takeover proposal.

  • The non-binding offer was made by Pacific Equity Partners (PEP) to acquire 100% of the company via a scheme of arrangement.

  • An Independent Board Committee has granted PEP exclusivity for due diligence until 11 July 2025.

Shares in integrated building services company Johns Lyng Group Ltd (ASX:JLG) rocketed higher on Wednesday morning following confirmation that the company is in takeover discussions. After emerging from a trading halt, JLG shares surged 18% to trade at AUD 3.01, significantly outperforming the broader S&P/ASX 300 Index, which was up just 0.5% at the same time.

The sharp rally comes after Johns Lyng confirmed widespread media speculation by revealing that it had received a non-binding, indicative proposal from private equity firm Pacific Equity Partners (PEP). The offer, received almost a month ago, proposes acquiring 100% of JLG’s issued shares through a scheme of arrangement.

While specific details of the proposed acquisition—including the offered valuation—have not been disclosed, the announcement confirmed that certain senior management figures, including CEO and largest shareholder Scott Didier, may retain a stake in the company through scrip consideration under the proposed transaction. This indicates PEP’s interest in preserving continuity in leadership and aligning incentives post-acquisition.

Johns Lyng Group operates across Australia and the United States, providing building and restoration services. Its core business focuses on repairing and restoring properties damaged by insured events such as storms, fire, and other natural disasters.

To assess the proposal independently, JLG’s board formed a special committee comprising non-executive chairman Peter Nash and directors Peter Dixon, Alison Terry, and Alexander Silver. The Independent Board Committee has granted PEP a period of exclusivity until 11 July 2025 to conduct confirmatory due diligence and potentially table a binding offer. Notably, for a four-week period commencing 29 May, the company has waived its customary fiduciary exception.

Despite investor enthusiasm and the share price spike, the company cautioned shareholders that the discussions remain preliminary. "There is no certainty that the discussions with PEP will result in any transaction," the company stated. Any eventual agreement would require multiple layers of approval, including from the Independent Board Committee, the Foreign Investment Review Board, the shareholders, and the Court.