abc learning soon to soar, page-24

http://www.news.com.au/heraldsun/story/0,21985,23922810-664,00.html


CRISIS-HIT ABC Learning Centres could be thrown a $300 million lifeline with six bids from rival childcare centres and equity firms in Britain to buy out the British end of the troubled Australian empire.

But it could all come too late to convince investors of the viability of the troubled group with the sale unlikely to go through this financial year.

ABC Learning had forecast earnings before interest and tax of up to $114 million to assure creditors and investors of its continued viability, but that takes into account the sale of its British business which is not expected to go through for some months.

The Busy Bees childcare group - Britain's largest childcare provider bought by Eddy Groves two years ago - has been valued by analysts in London at up to $300 million - $50 million more than what ABC Learning paid to acquire the chain in 2006.

Busy Bees is the main provider of childcare vouchers that let parents pay fees through their pre-tax income. Companies buy into the scheme to offer employees a salary sacrifice.

Mr Groves also owns Leapfrog nurseries in Britain.

Investment bank NM Rothschild, which is advising the business, is considering bids for the whole company or the two parts separately.

The British-based Accor, best known for its hotels chain, is understood to be one of the final contenders vying for the business.

Busy Bees voucher business has grown 60 per cent in terms of the participating number of companies and parents in the year to June 2007.

Market analysts say the interest in buying the group stems from its resilience to economic slowdowns.

ABC Learning shares have dropped more than 75 per cent this year after a slump in earnings raised concerns about its ability to repay debt.

Mr Groves came under fire earlier this week after he announced a fee rise at his centres - a move that effectively wipes out the Federal Government's childcare subsidies designed to meet out of pocket expenses.