Further proof that divestment campaigns are not strategically sound, with news that Spanish firm Ferrovial has launched a new takeover bid for Australian detention centre operator Broadspectrum (formerly known as Transfield).
However, Ferrovial’s offer of $1.35 per share is well down on its previous takeover offer of $2 a share which was rejected last year by the Transfield board.
In August, FreedomWatch covered the divestment of Transfield shares by industry superannuation fund HESTA following a campaign by the Australian Nursing Federation and Australian Services Union. Even Gillian Triggs has criticized the business.
While many advocates believe a divestment campaign ‘punishes’ a business they don’t agree with, successfully lobbying a person, company or superannuation fund to divest shares simply transfers ownership from one entity to another. If a divestment campaign is successful in helping to reduce a share price all it does is make it cheaper for someone else to buy.
Given that yesterday’s Australian Financial Review noted that Ferrovial “as a large foreign company…would be insulated from the social backlash in Australia around the (detention centre) issue”, it would be ironic if all the unions and human rights lobby achieve is to help push ownership offshore, and at a lower price for Australian shareholders.