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An Australian broker, who declined to be named, said Temasek was a 'likely suitor' for ABC Learning, said to be the largest listed childcare centre operator in the world. Temasek refused to either confirm or deny it was a bidder, the Sydney Morning Herald reported. 'Temasek does not get involved in the operational and commercial decisions of our portfolio companies, including those in Australia. They are independent businesses managed by their respective boards,' it was quoted as saying in a statement. 'It is, therefore, inappropriate to make statements on the short-term performance of individual portfolio companies.' Mr Groves disclosed yesterday that he sold more than eight million shares in ABC Learning in a transaction worth A$14.8 million (S$19.3 million), according to Australian media reports. At least two other ABC Learning board members reportedly dumped much of their holdings, after receiving calls on their margin loans. Mr Groves, who owns 6 per cent of the stock, however, refused to comment on whether he had been forced to sell his shares. Reports claimed, though, that Mr Groves and his wife, Le Neve, had to sell 5.6 per cent of the company's listed stock for as low as A$1.83 a share. ABC Learning's share price crashed by 70 per cent at one point but later recovered to close down 43 per cent after an earnings drop fuelled fears that the company might struggle to repay its debts. Investors were concerned that ABC Learning, which has extensive interests in the United States, might suffer from a downturn in the American economy. There were also worries that the value of its 1,000 US childcare centres could drop as a result, and trigger a breach of its covenants on more than A$1 billion worth of loans. ABC Learning reported a 42 per cent fall in its first-half profits late on Monday. The subsequent plunge in its share price knocked nearly A$270 million off the value of Temasek's investment. Temasek paid A$402 million, or A$7.30 a share, for its 12 per cent stake in May last year. The stake is now worth A$123.6 million. Mr Groves blamed the crisis on hedge funds that, he suggested, had sold the stock short - that is, they sold borrowed stock in the hope the price would fall further. 'I can't categorically say that's what happened, I can only listen to what people have told me in the marketplace,' he said. 'I think there's been some mischief in the stock,' he added. He insisted the business remained in a strong position. Mr Groves' dramatic corporate fall was all the more surprising, given his huge success over the past two decades in a nation where many working couples place their children in childcare. After opening his first kindergarten in Brisbane in l988, he rapidly rose to become king of the Australian childcare industry before going on to conquer the American and British markets. Yet, he started his working life as a milkman. In an exclusive interview five years ago, he reflected on his past, explaining that delivering milk was an incredible discipline. 'The good thing about working 19 hours a day is that you don't have the time to be silly and spend the money doing ridiculous things,' he said. 'Delivering milk is an incredible discipline.'
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