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Spotless chief executive Martin Sheppard says the company is getting on with its job despite a bid from Downer EDI.

by Simon Evans
The chief executive of takeover target Spotless Group, Martin Sheppard, says the company is "axe to the grindstone" on an operational front and isn't being distracted by the $1.2 billion bid by predator Downer EDI.
"Absolutely not. We are very focused on delivering on our strategy," Mr Sheppard told The Australian Financial Review on Thursday afternoon.
"We've been really clear around our strategy."
The company said it had secured long-term extensions to some important contracts in the health industry including a five-year integrated contract extension with the Alfred Hospital in Melbourne and a four-year extension to a national linen and laundry partnership with hospital operator Healthscope.

Mr Sheppard said they represented combined contract revenues of about $210 million over five years, and brought the total value of key strategic contracts awarded during March to more than $300 million.

Spotless provides cleaning, food, grounds and garden maintenance and security services to The Alfred Hospital. It has also secured a renewal and expansion of an integrated linen rental and laundry services contract at 31 Healthscope hospitals around Australia. The Financial Review foreshadowed the contract wins this week.
Downer EDI made a bid of $1.15 per share for Spotless more than a week ago but has come under substantial pressure from investors for pursuing the deal, which included a $1 billion equity raising that had a poor reception from the markets.
Spotless ponders response

Mr Sheppard wouldn't be drawn on how long before Spotless would make an official and considered response to the Downer EDI bid.

"We need time to respond," he said.
He said Spotless had been mobilising staff to Queensland and ensuring that its customers and sites in areas that had been hit by rough weather and flooding in the aftermath of Cyclone Debbie were being looked after.
"We've been securing our sites, we've been helping our customers," Mr Sheppard said.
There had been no looking over the shoulder inside Spotless after the emergence of the Downer EDI takeover bid.

"Operationally we've been absolutely axe to the grindstone," he said.
Mr Sheppard said the integrated services offered by Spotless at the Alfred Hospital were an example of the multi-service, long-standing contracts that Spotless was shifting its business towards under a strategy to exit from low-margin short-term contracts.
"That's the power and potency that we can deliver on contracts that have significant scale," he said.
Spotless could provide a breadth of services that many rivals couldn't hope to offer.

"There are barriers to entry to others."
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