LONDON (Alliance News) - Produce Investments PLC shares surged on Tuesday as the fresh potato and daffodil producer said it reached an agreement with Promethean Investments LLP for an acquisition of the company by Promethean vehicle April 1983 Bidco Ltd.
The offer of 193 pence per share in cash values Produce as a whole at GBP53.0 million. The 193p offer is a 35% premium on the company's closing price of 143p on Monday. Shares in the company were trading 31% higher at 187.01p on Tuesday, following the announcement.
The Promethean offer includes a partial share and loan note alternative under which Produce shareholders will be able to elect to receive 98.43p in cash and one unit. Each unit comprises one April 1983 share and one April loan note.
April 1983 is a newly-formed Jersey entity owned and controlled by funds managed by Promethean Investments, a specialist investor providing capital solutions in the lower mid-market.
Produce's board said it "considers the terms of the offer to be fair and reasonable".
Produce's Chief Executive Officer Angus Armstrong said: "This transaction will allow Produce Investments to move to a more suitable private market environment for a company of its size, thereby eliminating the regulatory burden, constraints and costs of maintaining a public listing. Existing management will continue to run the business, and, along with them, I look forward to continuing to grow the business and serve our customers."
Both Armstrong and Chairman Ronald Clapham have agreed to accept the Promethean offer with respect to their own shareholdings in Produce.
In a separate release, Produce said it expects its earnings before interest, taxes, depreciation and amortisation for the financial year that ended June 30 to be "in line with management expectations", despite expecting to incur impairment and other exceptional charges in the range of GBP16 million to GBP16.5 million.
For the year to June 2017, the company posted revenue of GBP200.1 million and pretax profit of GBP6.6 million.
Produce will publish its interim results on October 12.
