(Alliance News) - Franchise Brands PLC said Wednesday it has agreed terms of an all-share takeover offer for Filta Group Holdings PLC, valuing the Rugby, England-based company at GBP49.8 million.
Filta provides cooking oil filtration and fryer management services.
Under the agreement, the Manchester-based brand owner Franchise Brands will issue 1.157 shares in exchange for one share in Filta.
Based on Franchise Brands's closing price of 147.5 pence on Tuesday, this values each Filta share at around 170.7p, a 7.7% premium to its closing price of 158.5p on Tuesday, and its entire issued share capital at around GBP49.8 million.
Shares in Franchise Brands were down 1.7% at 145.00 pence on Wednesday, reflecting a market cap of GBP139.0 million, while Filta's shares were 2.2% lower at 155.00p, representing a market cap of GBP45.2 million.
The acquisition is conditional on Franchise Brands gaining valid acceptances from at least 75% of Filta shareholders, approval from Franchise's own shareholders at an upcoming general meeting, and the admission of new shares on AIM, while Filta's shares cease trading.
So far, Franchise Brands has gained irrevocable undertakings from 23.8 million Filta shares, representing 82% of the company's share capital. The offer has a long stop date of November 30.
"As we operate in similar markets to Filta, we know the business well, so we are delighted that Filta will be joining Franchise Brands. Bringing the businesses together will enable us to offer a broader range of complementary services to our combined customer base, providing competitive advantages in our ambition to offer a "Water In, Waste Out" service to commercial customers and significant opportunities for future growth," said Executive Chair Stephen Hemsley.
"With the benefit of greater scale, we will be able to leverage the combined group's expertise and shared services, including our scaleable technology, to drive future growth in revenue and profits, including by growing and developing Filta's UK and European franchise business. The enlarged group will also be well positioned to expand in North America, given Filta's well-established and successful franchise business in the region," Hemsley added.
By Dayo Laniyan; dayolaniyan@alliancenews.com
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