Fri, 03 Sep 2010 | BUSINESS SALE
A deal that could see Leeds infrastructure and utilities company Spice fall into private equity ownership is approaching completion.
The board of the company this week said it was going to recommend a £246.5 million offer for the company from buyout experts Cinven, which former chief executive, Simon Rigby, described as "compelling".
Mr Rigby said the 70p per share potential cash offer from the company – from which he would gain £20.9 million on his 8.6 per cent stake – would see the company go to a "good home".
Spice has been resisting offers from Cinven since May, but yesterday announced that it was in advanced discussions with the group. It follows the beginning of talks with another private equity firm, which resulted in Cinven sweetening their offer to maintain their interest and end the talks.
Cinven first approached Spice – whose work ranges from checking power lines to installing water meters – in April with an offer of 56p per share. Spice dismissed the offer as "opportunistic" and claimed that it significantly undervalued the group. Further offers were made at 62p and 65p per share but all were rejected until the 70p offer.
In a statement, the board of the group said, "Although [we] believe that the company has a strong future as an independent business, it recognises that, due to the cash nature and premium of the potential offer, it is in shareholders' interests to facilitate further discussions with Cinven," said the group."
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