Abc's Us Centres In The Lurch As Talks Go On
The Age
Tuesday March 4, 2008
THE future of ABC Learning Centres' child-care centres in the US is in limbo, as the company continues talks with an as-yet-unidentified interested party.
But the world's biggest child-care centre operator looks likely to be broken up. Founder Eddy Groves remains in Los Angeles, along with his advisers from Goldman Sachs JBWere, to negotiate a deal.Shares have been suspended from trading on the Australian Securities Exchange until tomorrow.They fell almost 43% last Tuesday, after the company said that net profit had fallen 42% to $37.1 million.As at December 31, ABC Learning was operating 1095 child-care centres in Australia, 116 in New Zealand and 112 in Britain.But the company's expansion strategy relied on its acquisitions in the US, where it operates 1000 "schools" under the Learning Care Group banner.ABC Learning acquired Learning Care Group in January 2006, and with it the La Petite Academy, Childtime, Tutor Time, The Children's Courtyard and Montessori Unlimited brands.According to their website, the "schools" care for about 167,000 children and employ about 23,000 staff."Today, the company is the fastest-growing, second-largest for-profit child-care provider in North America," the website says.But it is believed little news of any impending sale has leaked out to US-based parents who use the child-care centres.In contrast, parents at Australian ABC Learning centres have received two letters that assured them their centres will operate as usual. They were encouraged to call a toll-free number to speak to directors Le Neve Groves and Martin Kemp.In a statement to the market, ABC Learning said that the sharp fall in its share price last Tuesday was probably caused by speculation that it had defaulted under its banking covenants.The company insists it has locked in $1.43 billion in debt until late 2010.
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