TMA pulls out of Blue Star bid as former owners linked to takeover

TMA managing director Anthony Karam confirmed to ProPrint that the company “submitted a binding fully funded offer to purchase Blue Star”.

“The offer was the highest possible price that could be paid given the capital required to continue to operate the business as a going concern without some slight of hand such as putting parts of Blue Star into administration. TMA was pushed for more money and pulled out as this would have simply made Blue Star unviable for TMA.

“The reason is that Blue Star is in this predicament because of its current debt loading; the price they are pushing to sell Blue Star for will only create another over-capitalised structure.

“It is completely possible that any potential new owners who pay the asking price may find themselves and Blue Star in the same position in two years’ time that Blue Star is in now,” added Karam.

Karam would not reveal how much TMA offered, but it is thought to be lower than the $100 million-plus being touted when the sales process was announced in mid-2012.

Earlier this year, TMA had attempted to acquire publicly listed group PMP, but the PMP board rejected the approach because they were “not satisfied” TMA had enough money to complete the takeover.

However, TMA was adamant that the finance was in place. With bids for both PMP and Blue Star this year, it is thought that Karam’s company is sitting on a significant war chest, making TMA one to watch for future acqusition activity.

[Related: TMA plucks Qantas contract from IPMG]

The revelations about TMA’s Blue Star bid come as speculation puts two former Blue Star figures in the frame as potential suitors for the trans-Tasman business: Geoff Selig and Tom Sturgess.

Selig was managing director of Blue Star Australia before departing not long after the NZ$385 million sale to Champ Private Equity in 2006.

He re-entered the industry in 2010 by purchasing the assets of Sydney-based heatset operation Quality Print Group out of administration, establishing Caxton Web.

Selig had no comment when contacted by ProPrint this morning.

According to a report yesterday on the Australian Financial Review‘s ‘Street Talk’ pages, which cover industry rumours and gossip, a Selig takeover of Blue Star could lead to a closure of the group’s significant sheetfed operations across Australia.

However, a well-placed source told ProPrint that given Selig’s background with the sheetfed business, this was unlikely.

ProPrint also spoke to Tom Sturgess, the former controlling shareholder of Blue Star, who sold the group to Champ and retains a sizeable stake. Sturgess re-entered the industry earlier this year with the acquisition of one of the group’s New Zealand divisions, Rapid Labels.

Sturgess would not comment on the most recent rumours, which link him to a potential management buyout of Blue Star’s entire New Zealand business.

However, he did say he was “delighted” at the outcome of the buyout of Rapid Labels by Tiri Industries, a diversified $200 million group in which he has the controlling stake.

He was “thrilled with the investment and the opportunity to work with the quality people at Rapid and provide resources to them so that they can continue their progress in marketplace. We couldn’t be more pleased.”

Blue Star has been on the block since the middle of this year, with Goldman Sachs leading the sale process.

Well-placed sources have said a final outcome on the Blue Star sale process is expected within three weeks, or as early as next week.

Blue Star did not comment when contacted by ProPrint.

[Related: ups and downs of Blue Star]

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