Buyout company Cinven last week said Britain’s Spice Plc had rejected a takeover bid that values the provider of engineering and support services to utility companies at almost 200 million pounds ($309.3 million). Cinven issued a statement saying that it had proposed an indicative price of 56 pence per share in cash for Spice and that it was considering making an offer for the company. “This approach was rejected by the board of Spice and there are currently no discussions taking place between Cinven and Spice,” the private equity firm said.
Shares in Spice reached a high last week of 56.75p, a gain of of 13 percent in the week. Spice shares are currently trading at 54.25p (22nd June, 11.28am).The share price has moved from a low of 27.5p on 26 March this year.
THE SPICE RESPONSE TO THE CINVEN ANNOUNCEMENT
The Board of Spice notes the announcement issued today by Cinven Limited (“Cinven”) in relation to its interest in a possible offer for Spice.
We believe this approach significantly undervalues Spice, and the Board has not entered into discussions with Cinven, or any other party, in relation to a potential offer for Spice.
Spice has recently appointed Martin Towers as Chief Executive on a permanent basis and has communicated a clear set of objectives to enhance value for shareholders in the short term. We’ve made excellent progress in executing these objectives, including the recent disposals of the Telecoms and Gas businesses, reducing the level of indebtedness and identifying specific restructuring and reorganisation actions to continue to drive cost out of the Group. The strategic review in relation to the Facilities business is ongoing. The outcome of this review is expected to result in the Group’s core operations being focused on markets which have strong underlying regulatory and environmental drivers. These actions leave the Group well positioned for the new financial year and beyond.
The Board believes that the approach from Cinven is opportunistic and significantly undervalues the Company. Spice is trading in line with the Board’s expectations, and our priority remains enhancing shareholder value. The Board is confident that Spice can deliver significant value to shareholders over the medium term.
The Group expects to announce its results for the year to end April 2010 on 6 July 2010.
Location: UK, Morley, Leeds