By Rajasik Mukherjee and Kumar Tanishk
Sept 22 (Reuters) - IDP Education on Tuesday rejected a roughly A$694.7 million ($493.93 million) takeover proposal from Blackstone, saying the sweetened bid was "highly opportunistic" and substantially undervalued the business.
The rejection pits Blackstone's bid for IELTS co-owner IDP against the board's bet that a sweeping restructuring will revive earnings and deliver greater value to shareholders.
Blackstone-managed funds offered A$2.50 per share in cash for
IDP on September 9, after an earlier A$2.30 bid was rejected. The latest offer was an around 56% premium to IDP's September 8 close.
IDP's board said the proposal "substantially undervalues" the company and failed to account for the future earnings potential and benefits from its multi-year transformation programme.
The private equity giant's approach follows a sharp deterioration in IDP's financial performance. Statutory net profit fell about 90% over two years to A$13.3 million in fiscal 2026, while revenue dropped about 23%.
Tighter immigration and student-visa policies across major destination markets have hit international student flows, prompting IDP to cut jobs and its IELTS test-centre footprint. The company expects adjusted EBIT of A$95 million to A$115 million in fiscal 2027, versus A$122.9 million in 2026.
The deal underscores a broader standoff between private equity buyers seeking opportunities in beaten-down Australian stocks and company boards that argue short-term industry headwinds are masking the value of their businesses.
Hersh Oberoi, global research director at Balfour Capital Group, said the deal's premium largely reflected how far IDP's shares had fallen rather than the underlying value of the business.
Oberoi expects Blackstone to return, saying an offer of around A$3 to A$3.25 per share could be needed to secure due diligence.
Shares of the Melbourne-based firm settled 20.7% higher at A$2.16, a more-than-one-month high, on Tuesday.
($1 = 1.4065 Australian dollars)
(Reporting by Rajasik Mukherjee and Kumar Tanishk in Bengaluru; additional reporting by Subhalakshmi Dey; Editing by Subhranshu Sahu, Mrigank Dhaniwala and Nivedita Bhattacharjee)
