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Downer launches $1 bln bid for Spotless Group

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  1. Australian dollar denominations shown in a photo illustration at a currency exchange in Sydney, Australia, June 7, 2016.

    MELBOURNE, March 21 (Reuters) - Downer EDI Ltd (DOW) launched a bid for Spotless Group (SPO) on Tuesday valuing the cleaning and catering firm at A$1.27 billion ($981 million), in a move to expand its services beyond engineering and construction.

    Downer is offering A$1.15 a share in cash for stock it does not already own in Spotless, a 59 percent premium to its close on Monday.

    Downer, which acquired a 19.9 percent stake in its target in a raid late on Monday, said it would fund the deal mostly through the sale of A$1 billion worth of new shares to its existing shareholders.

    "The acquisition of Spotless is a significant investment in Downer's strategy to expand its capabilities and strengthen its position as a leading provider of services to customers in Australia and New Zealand," Downer Chief Executive Grant Fenn said in a statement. ($1 = 1.2940 Australian dollars)

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