CareTech Holdings PLC on Monday accepted a £870.3 million takeover bid tabled by a consortium which features the residential social care and education services firm’s founders.
The offer from Amalfi Bidco Ltd, a consortium which includes CareTech founders Farouq and Haroon Sheikh and THCP Advisory Ltd, has the support of over 50% of shareholders.
The consortium will pay a 750 pence cash consideration, a 28% premium to CareTech’s share price on March 4, the day before the Sheikh brothers said they were in the ‘early stages’ of forming a takeover consortium.
CareTech shares were 21% higher at 740.00p each in London on Monday morning, giving it a market capitalisation of £838.7 million.
CareTech shareholders have also been offered an alternative to the cash offer. They are able to receive rollover non-voting ordinary shares in Amalfi.
The bid has the support of just under 51% of CareTech shareholders, through irrevocable undertakings and letters of intent received.
The offer is expected to become effective in the third quarter.
‘On behalf of the CareTech independent board, we are pleased to have reached agreement on the terms of a recommended cash offer by Bidco. We believe that this is in the best interests of our investors and other stakeholders, with the potential to deliver a number of strategic opportunities for the business through private ownership by Bidco. As a consequence of the offer, CareTech’s founders will remain the controlling shareholders of the business. We believe this will allow the existing care-focused culture of the organisation to continue and enable CareTech to continue to deliver high standards of care to its service users,’ CareTech Non-Executive Jamie Cumming said.
The Sheikh consortium in April lifted its takeover proposal to 750p, from 725p previously. CareTech had already been ‘minded to recommend’ that 725p offer, the Sheikh brothers noted in April.
At the time, the 750p proposal did not constitute as a firm offer. The consortium had until June 27 to table a firm bid.
DBAY Advisors Ltd, another suitor, also has a June 27 deadline. DBAY in April had also made a 750p offer.
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