(Alliance News) - Performance materials firm Low & Bonar PLC said Friday it has agreed to a GBP107.0 million takeover offer by FV Beteiligungs GmbH, a subsidiary of German diversified group of companies Freudenberg SE.
Under the acquisition's terms, Freudenberg will acquire Low & Bonar for 15.5 pence per share, reflecting a doubled premium to Low & Bonar's closing price of 7.7 pence per share on Thursday.
Shares in Low & Bonar closed 7.9% lower at 7.12 pence on Friday in London.
The acquisition is conditional on gaining at least 75% in shareholder approval at a court meeting and extraordinary general meeting, as well as being sanctioned by the Court of Session in Edinburgh.
Low & Bonar expects the acquisition to be completed within the first half of 2020. So far, Freudenberg has obtained irrevocable acceptances from around 442.1 million shares in the company, reflecting 64% of Low & Bonar's entire issued share capital.
"I am delighted that FVB have made an attractive cash offer to acquire Low & Bonar. During my short tenure at Low & Bonar, the strengths of our people, technologies and market positions have been apparent, but the group faces a challenging financial position and highly competitive markets," said Executive Chair Daniel Dayan.
"Freudenberg will provide Low & Bonar's businesses and people with opportunities to develop and grow, as well as enhancing the value proposition to the customers of both businesses," Dayan added.
Also on Friday, Low & Bonar said the difficult trading conditions in its first half ended May have continued in the second half to date, leading to sales and profit in the third quarter ending August 31 being below management expectations.
Looking ahead, the company said it does not expect conditions in the markets to improve in the short term, therefore Low & Bonar does not expect to recover the shortfall in third quarter trading in the year.