Key Takeaways
- • Blackstone's third takeover approach values Australia's IDP Education at about A$833.7 million ($573.34 million), offering A$3 per share, a 20% premium to its previous proposal.
- • IDP shares closed 16.3% higher at A$2.57, their highest since late June and best day since September 22, though still trading below the latest offer price.
- • IDP's board has not decided whether to support the non-binding proposal and warned there is no certainty a transaction will proceed.
- • IDP previously rejected Blackstone offers of A$2.30 and A$2.50 per share as undervaluing the company and made at a "highly opportunistic" time.
- • The offer sits well above the A$2.04 median analyst price target compiled by LSEG, and the stock has lost about 55% so far this year.
Summary
Shares of Australia's IDP Education rose more than 16% on Wednesday after the company said it was weighing a sweetened takeover proposal from Blackstone, according to Reuters. The non-binding proposal values the IELTS English language exam co-owner at about A$833.7 million ($573.34 million) and is priced at A$3 per share, a 20% premium to Blackstone's previous offer. The stock closed 16.3% higher at A$2.57, its highest level since late June and its best session since September 22, but remained below the latest offer price.
The proposal is Blackstone's third approach for the company. IDP had previously rejected offers of A$2.30 and A$2.50 per share, stating that they undervalued the business and were made at a "highly opportunistic" time. The new bid also sits well above the A$2.04 median analyst price target compiled by LSEG. IDP said its board has not yet decided whether to support the proposal and cautioned that there is no certainty a transaction will proceed. Blackstone declined to comment.
David Tuckwell, chief investment officer at ETF Shares, said the offer was enough to start a conversation and probably to open the books, but not yet enough for a recommendation. He argued that Blackstone is buying a market-leading global platform at a cyclical low, and 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.
The approach follows 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. The stock hit a record low in September and has lost about 55% so far this year, even after Wednesday's surge. At the time of reporting, A$1 equaled 1.4541 Australian dollars.
The proposal is Blackstone's third approach for the company. IDP had previously rejected offers of A$2.30 and A$2.50 per share, stating that they undervalued the business and were made at a "highly opportunistic" time. The new bid also sits well above the A$2.04 median analyst price target compiled by LSEG. IDP said its board has not yet decided whether to support the proposal and cautioned that there is no certainty a transaction will proceed. Blackstone declined to comment.
David Tuckwell, chief investment officer at ETF Shares, said the offer was enough to start a conversation and probably to open the books, but not yet enough for a recommendation. He argued that Blackstone is buying a market-leading global platform at a cyclical low, and 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.
The approach follows 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. The stock hit a record low in September and has lost about 55% so far this year, even after Wednesday's surge. At the time of reporting, A$1 equaled 1.4541 Australian dollars.
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