- Recommended 130p cash offer
- Rival bid considered
- Proposal has 40% backing
Shares in Bank of England bank note printer De La Rue (DLAR) climbed 17% to a new three-year high of 130.7p after agreeing an all-cash takeover by US private equity group Atlas at 130p per share.
This follows the announcement by De La Rue on 4 February that it was launching a formal sale process.
RIVAL BIDDERS
The shares briefly traded higher than the offer price following a Sky News report Pension SuperFund Capital, the investment vehicle of city veteran Ed Truell, had informed De La Rue of his plans to make a 132.17p per share bid.
De La Rue later confirmed the approach from Truell and said the board had taken it into account before before recommending the all cash offer from Atlas.
The director-recommended offer represents a 19% premium to the closing price on 11 December 2024, when the company revealed it was in discussions with a consortium looking to take a partial equity stake in the business at 125p per share.
The offer price is 38% above the close on 14 October when De La Rue announced the sale of its authentication division to US-based industrial technology company Crane NXT for £300 million.
WHY ATLAS?
Atlas said its core strategy is to acquire underappreciated industrial companies operating in mature industries with cyclical cash flows and limited growth prospects.
The investment group believes De La Rue is best owned by a long-term investor such as Atlas which is prepared to accept ‘earnings cyclicality and a challenging end market outlook.’
Atlas and its affiliates have investments in a diverse group of 27 manufacturing and distribution business which generate $18 billion of annual revenues.
RECOMMENDED OFFER
The directors of De La Rue unanimously recommended the offer to shareholders and said the company had received a non-binding letter of intent from its largest shareholder, Aberforth Partners, confirming it would vote in favour of the offer.
The company has received binding undertakings and letters of intent to vote in favour of the offer in respect of 40.3% of the total shares in issue. The proposed acquisition needs the approval of at least 75% of all shareholders.
