IDP rejects Blackstone's improved takeover offer

Sept. 22 (Reuters) - IDP Education IEL.AX has rejected a roughly A$694.7 million ($493.8 million) takeover proposal from Blackstone BX.N, arguing the sweetened bid was "highly opportunistic" and substantially undervalued the business.

The rejection 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.

On Sept. 9, funds managed by the U.S. private equity giant had offered A$2.50 per share in cash for the co-owner of the IELTS English language exam, representing a premium of about 56% to IDP's close on Sept. 8.

The Australian firm, which had rejected an earlier A$2.3 per-share proposal from Blackstone, cited its ongoing multi-year transformation programme as one of the reasons for the rejection.

"Board also considers that the indicative proposal does not factor in the future earnings potential of the business... and the associated benefits that are yet to be realised," the firm said in a statement.

IDP has come under pressure in recent years as tighter immigration and student visa policies in Australia, Canada and Britain weighed on its earnings, with its shares falling nearly 100% from a 2021 peak.

Last month, the firm flagged weaker 2027 earnings, underscoring the pressures facing the international education sector as government policies shift, resulting in fewer visa approvals and softer demand.

The firm reported a 25% decline in student volumes across its four key destination markets - Australia, the UK, the U.S. and Canada - in fiscal year 2026.

Shares of Melbourne-based IDP settled 20.7% higher at A$2.16, a more than one-month high on Tuesday.