Strix proposes tender offer to return GBP10 million via 10% of shares

(Alliance News) - Strix Group PLC on Thursday proposed a tender offer, which sees it return GBP10 million to shareholders.

The Ronaldsway, Isle of Man-based supplier of kettle safety controls has priced the offer at 43p per share, which is 11% ahead of its 38.9p closing price on Wednesday. It plans to return around 10% of its issued share capital.

Strix shares rose 3.9% to 40.40 pence around noon on Thursday in London, and are down 2.9% over the past year.

The tender offer follows the sale of its Billi division, which closed in January. Though Strix said the offer for Billi was unsolicited, it came after Strix had begun a "debt reduction programme, in response to a marked slowdown in the Controls division and a more challenging macroeconomic backdrop, including inflationary pressures on commodity prices".

Following the Billi disposal, which generated GBP105.0 million in net proceeds for Strix, the latter estimated its cash balance as GBP35 million, "providing a robust financial platform for the group's next phase of development".

Strix used the disposal proceeds to repay debt and in February, launched a GBP10 million buyback programme, under which it has repurchased shares worth GBP3.4 million so far at an average price of 41.2p.

Buybacks will be paused to facilitate the tender offer, Strix noted, with capital allocation to be clarified in "a wider strategic update" later this year.

"In addition to the current share buyback programme, the board has reviewed the various options for returning capital to shareholders, as well as noting the share price development, and concluded that the tender offer represents the most appropriate and efficient mechanism, enabling all eligible shareholders (excluding those in restricted jurisdictions) to participate on an equitable basis," the company noted.

The offer will be open from Friday until April 30, when shareholders will meet to vote on the company's authority to proceed with the offer. It will also be subject to Strix receiving valid tenders for at least 5.8 million shares.

By Holly Munks, Alliance News reporter

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