(Alliance News) - Pollen Street Secured Lending PLC on Tuesday said the UK Panel on Takeovers & Mergers has allowed another extension to Waterfall Asset Management LLC's cash offer deadline and announced it is considering a run-off of the company and return of capital.
Shares in Pollen Street Secured Lending were up 3.5% at 722.37 pence in London in morning trading.
Pollen Street Secured Lending in February had said it was in talks with Waterfall for a possible cash offer by funds advised by Waterfall to acquire the company's entire share capital, with Waterfall required to either announced a firm intention to make an offer or walk away by Tuesday this week.
However, at the request of Pollen Street Secured Lending's directors, the panel has allowed the deadline to be extended to July 14 "to enable the parties to continue their ongoing discussions". The deadline had already been extended in March, April, and May.
According to the London-headquartered investment trust, which invests in credit assets from non-bank lending platforms, Waterfall is still committed to pursuing a potential offer.
"Having consulted with shareholders holding a significant majority of its shares in recent weeks the board has agreed to the extension of the relevant deadline because it believes, in the light of the continued commitment of Waterfall and the company's largest shareholder, it remains in the best interests of the company and shareholders to continue to seek to bring the possible offer to the point where it can be formally considered," said Pollen Street Secured Lending.
The terms of an offer made are subject to due diligence completion by Waterfall.
"As noted previously, the board will continue to seek to progress the due diligence process but is mindful that this is likely to take some time, especially as it may not be possible prior to the appointment of a new investment manager," Pollen Street Secured Lending added.
In early March, Pollen Street Secured Lending said it was mulling legal action against its investment manager PSC Credit Holdings LLP, accusing it of deliberately withholding information needed for proper due diligence to be carried out by Waterfall.
At the same time as announcing the possible offer in late February, Pollen Street Secured Lending gave PSC 12 months' notice that their relationship was to end.
Over the past four weeks, the company has been consulting with shareholders. Most shareholders "would like to see the possible offer brought to the table and otherwise are minded to support an orderly run-off of the company's assets and return of capital to shareholders", it said.
There also is majority support for continuing the current investment strategy under the current or under a new manager. To this end, Pollen Street Secured Lending has progressed talks with possible replacements for PSC and is likely to reach a decision on a preferred candidate in a matter of weeks.
"The board has not taken any final decisions on future strategy at this stage but is likely in due course to recommend to shareholders that the company pursues an orderly run-off with capital to be returned to shareholders in as timely a manner as possible during the process. This will not preclude continuing to seek to bring the possible offer to the point where it can be formally considered. Any change to the company's investment policy will be conditional upon the approval of shareholders. Further announcements will be made in due course," said Pollen Street Secured Lending.
By Anna Farley; annafarley@alliancenews.com
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