International power generation firm ContourGlobal (GLO) gains 33.4% to 258p – topping the FTSE 250 leaderboard – as the company is subject to a 263.3p cash bid from private equity firm KKR.
The bid values the business at £1.75 billion and looks set to bring an end to the company’s career as a public company – with ContourGlobal recommending the offer to shareholders. The price on the table represents a 36% premium to the shares’ previous close.
Contour floated in London at 250p in November 2017 but struggled to make much impact and the KKR takeout offer is only slightly above its valuation when it first listed, despite Contour’s chair describing it as ‘an attractive price’.
‘DEAL LOOKS A FAIT ACCOMPLI’
Commenting on the deal Contour CEO Joseph Brandt said: ‘That an institution of KKR's repute would offer to acquire ContourGlobal is a testament to our people and their commitment to the CG Way - passion and commitment to continuously improve, pursue excellence and to work hard without boundaries as an integrated multinational team.
‘What started in a single small office with three people in New York has grown 17 years later into a global, high-growth power generation company operating 138 power plants in 20 countries.’
AJ Bell investment director Russ Mould said: ‘Power generation business ContourGlobal, which has struggled to gain traction on the stock market after a 2017 IPO, looks set to disappear from London as private equity firm KKR swooped for its portfolio of energy projects from across the world.
‘With Contour set to recommend the takeover offer, which is pitched at a healthy premium, the deal looks like a fait accompli at this stage.’
DISCLAIMER: Financial services company AJ Bell referenced in this article owns Shares magazine. The author of this article (Tom Sieber) and the editor (James Crux) own shares in AJ Bell.