Johns Lyng Group has confirmed Pacific Equity Partners has made an indicative takeover proposal and is taking a closer look at company data before a possible firm offer.

The proposal is “subject to a number of conditions customary for transactions of this nature”, the building services and restoration company said this morning.

Johns Lyng received the “non-binding indicative offer” after the market closed on May 16, and it has given Pacific Equity Partners exclusive access to a virtual data room until 5pm on July 11 to enable it to make a binding offer. 

“It should be noted there is no certainty that the discussions with PEP will result in any transaction and no assurance is given that a transaction will proceed,” it said.

The Pacific Equity Partners proposal involves acquiring shares through a scheme of arrangement, with some senior management, including largest shareholder and CEO Scott Didier, given the opportunity to retain an interest by receiving scrip consideration.

Any transaction would require approval by a Johns Lyng independent board committee and by shareholders.

The company has engaged JP Morgan and Nomura as financial advisers and MinterEllison as legal adviser.

Johns Lyng shares were up 19% to $3.02 in afternoon trade after being halted yesterday pending an announcement. The Australian Financial Review’s Street Talk column earlier reported Sydney-based Pacific Equity Partners had made an approach.  

The group’s market capitalisation was $719.4 million based on Friday’s $2.54 close, well down from levels reached in the past 12 months when shares traded as high as $6.19.

The company – which started in 1953 as Johns & Lyng Builders – debuted on the stock exchange in 2017 and has expanded in Australia, New Zealand and the US.

Last year’s annual report says insurance building and restoration services remain the foundation of the group. Its operations include regular insurance-related work and catastrophe business.

Revenue for the six months to December dropped to $573.1 million from $610.6 million in the previous corresponding period, amid a relatively benign spell for natural disasters.