(Sharecast News) - CareTech's co-founders are planning an offer to take the social care provider private, they confirmed on Monday morning, following media speculation over the weekend.
According to Sky News on Sunday, brothers Farouq and Haroon Sheikh were currently seeking the necessary finance to stage a takeover of the AIM-traded company.
Sky cited City sources as saying the plans were still at an early stage, although the company's independent directors had been made aware of the plans.
Executive chairman Farouq and chief executive officer Haroon founded the company in 1993, and still hold a minority stake, although they would need hundreds of millions of pounds to back any formal offer.
"Sheikh Holdings Group Investments - the family office of Haroon and Farouq Sheikh - notes the recent press speculation regarding CareTech Holdings, and confirms that it is in the early stages of forming a consortium for the purpose of considering making a possible offer for the entire issued, and to be issued, share capital of the company," the announcement to the market read on Monday.
"The board of the company has not been approached in relation to this matter."
CareTech's market capitalisation stood at £664m at the close on Friday, with its share value growing by over 10% in the last year.
Sky News said while the value of any offer was not yet clear, it was expected to be at a decent premium to the company's current market cap.
The firm's most recent numbers in December were ahead of expectations, with revenues up 13.8% to £489.1m and pre-tax profits rising 14.6% to £68.3m.
CareTech's board responded to the news on Monday morning, confirming that they had not been approached by the Sheikhs.
"The independent members of the board of CareTech confirm that they have not received an approach from Sheikh Holdings and there can be no certainty an approach will be made or that it may lead to an offer," the directors said in their statement.
"The independent board members of CareTech have formed a committee, led by Jamie Cumming, and are taking independent advice on matters relating to a possible offer."
At 1434 GMT, shares in CareTech Holdings were up 9.39% at 641p.
