LONDON (Alliance News) - The UK Competition & Markets Authority said Friday it has served an initial enforcement order on CareTech Holdings PLC and Cambian Group PLC following a reverse takeover.
Social care services company CareTech agreed the GBP372 million takeover of Cambian back in August, with Cambian shareholders now holding around 36% of the enlarged company's shares. Cambian provides children's specialist education services.
However, the competition watchdog's order will prevent the integration of these two businesses until it has conducted an investigation.
The CMA will investigate the deal's effect on competition. During that time, the Cambian and CareTech businesses must be kept separate with no integration of technology or customer & supply lists and no changes to key staff.
The businesses are also prevented from sharing commercially sensitive information and intellectual property. The order was served on Tuesday, with the deadline for the decision yet to be confirmed.
Nonetheless, new CareTech shares are still permitted to be issued, meaning that Cambian shares can be converted into CareTech shares.
CareTech shares were up 1.2% at 346.00 pence on Friday.
