50.89% support underpins extended A$0.73 Kip McGrath bid

Crimson builds a path to control

Crimson Consulting Australia has changed the arithmetic of its A$0.73-a-share takeover bid for Kip McGrath Education Centres (ASX:KME), saying it presently intends to waive the 90% minimum acceptance condition once it reaches a 50.1% relevant interest. That would allow the offer to proceed with Crimson in control but without compulsory acquisition of shareholders who decline to accept.

The bidder says acceptances from Pie Funds Management and Kip McGrath founder Kip McGrath account for about 31.01% of the company. Harvest Lane Asset Management has separately stated that it intends to accept its 19.88% holding, subject to no superior proposal being publicly announced and acceptance occurring no earlier than 21 days after its statement. Crimson says those positions together represent approximately 50.89% of KME shares, but the figure is not yet equivalent to unconditional acceptances of the entire block.

Offer deadline moves beyond the annual meeting

Crimson has pushed the closing date from 18 September to 14 October 2026, giving shareholders time to consider Kip McGrath’s 29 September annual meeting and its proposed distributions. The bidder has freed the offer from its no-distributions condition for the proposed fully franked dividends of 1.0 cent, 3.0 cents and 2.0 cents per share, provided the relevant resolutions pass in their proposed form.

That waiver does not mean the dividends are additional cash on top of the offer. Crimson retains the right to reduce the offer consideration by the cash amount of any dividend received before acceptance becomes unconditional. On the filing’s example, a shareholder could receive A$0.06 in dividends and A$0.67 from Crimson, for total cash consideration of A$0.73 before any usable franking-credit benefit.

Bidder attacks board’s unquantified reset

Crimson’s second supplementary bidder’s statement is also a direct rebuttal of Kip McGrath’s recommendation that shareholders reject the offer. The bidder points to FY2026 revenue of A$30.071 million, down 4.3%, declining lesson volumes and a reduction in franchise centres from 550 in FY2018 to 396 in FY2026. It argues that the board has not supplied FY2027 guidance, financial forecasts or a quantified valuation to support its proposed operational reset.

Those figures are being used by Crimson to frame the choice as certain cash against an unquantified recovery plan. The bidder says its A$0.73 offer represents a 62.2% premium to KME’s 29 July closing price of A$0.45 and implies about 4.4 times reported EBITDA, or 5.3 times adjusted EBITDA before lease-accounting treatment. These are Crimson’s valuation arguments, not an independent assessment of fair value.

Minority shareholders face the unresolved question

If Crimson reaches at least 50.1% but falls short of 90%, it says it intends to control KME through board appointments and may seek to remove the company from the ASX official list, subject to the usual conditions. Shareholders who do not accept could therefore remain invested alongside a controlling bidder without the statutory compulsory acquisition outcome that comes with 90% ownership.

The offer is scheduled to close at 7.00pm Melbourne time on 14 October, while Crimson’s notice on the status of its defeating conditions is now due on 7 October. The bidder also promises to increase consideration to A$0.74 if it reaches 90% before the offer closes. The central contest is no longer simply whether shareholders prefer A$0.73 or KME’s operational reset; it is whether Crimson can convert stated support into control, and what valuation minority holders will assign to the company after that point.