Australia's largest commercial childcare operator G8 Education is making a $162 million bid for rival Affinity Education as it continues a rapid expansion.
If successful the takeover will add 161 childcare and early learning centres to G8's portfolio, taking it past 620 centres, with places for more than 47,000 children.
The company made five separate purchases in the 2014/15 financial year, but the Affinity offer would dwarf those deals.
G8 acquired a 16.41 per cent stake in Affinity on Thursday, and is looking to take control with an offer of one G8 share for every 4.61 Affinity shares.
That values Affinity, which owns centres in six states and territories, at $162 million.
G8 Education chair Jenny Hutson described the offer as "compelling value" for Affinity shareholders.
But Affinity's board said the unsolicited approach was highly opportunistic and the proposal highly conditional.
It urged shareholders to no take action until the board can provide further guidance.
Motley Fool research analyst Scott Phillips agreed the takeover bid was opportunistic, given the 34 per cent fall in Affinity's share price on Thursday due to a weaker than expected earnings forecast.
"G8 is paying considerably more than they usually would on a centre per centre basis, but they are making a strategic acquisition that makes a lot of sense," Mr Phillips said.
"It's one of the few chances they'll get to acquire a very large number of centres."
Affinity itself has grown rapidly since being established in 2013, almost tripling in size.
Its shares gained 16 cents, or 29.6 per cent, to 70 cents on Friday, while G8 shares dropped seven cents, or 2.15 per cent, to $3.18.
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