Scapa shareholder urges board to strike a better deal with US suitor
A key investor in Greater Manchester industrial tapes and wound care group Scapa has called on its directors to strike a better deal with its US suitor.
On January 27, US engineering specialist Schweitzer-Mauduit International Inc (SWM) said it had reached agreement to buy Scapa Group in a £403m deal.
The acquisition is expected to be completed in the second quarter of this year, said the Ashton-under-Lyne group.
However, today (February 22), independent investment firm Blackmoor Investment Partners urged the board to rethink their support for the takeover, claiming it was not the only investor keen to see a better return for their holdings.
A Blackmoor spokesperson said: “Blackmoor Investment Partners invested in Scapa Group PLC in 2019 as an interesting transformation opportunity with strong intrinsic value.
“As a significant long term shareholder, we continue to view Scapa as a valuable business that is in the early stages of a highly promising strategy.
“As a result, we believe this opportunistic bid from Schweitzer-Mauduit International wholly undervalues the business and we are implacably opposed to it.”
They added: “While this offer represents a low 18.6% premium to the pre-bid price, it only represents a 12.3% premium to the highest share price during the month before the bid, and a ca.22% discount to the price pre-COVID and pre-Industrial (now fixed) problems.
“At a fundamental level, the bid values the business at as little as nine times prospective EBITDA earnings while similar companies trade on multiples above 14 and up to 18 times.
“We believe a number of other Scapa shareholders feel as we do, and we call on the board to reconsider its support for this offer and redouble their efforts to deliver better long term value for shareholders and other stakeholders.”
The proposed takeover needs to be accepted by 75% of Scapa shareholders at a remote meeting scheduled for March 17.
Scapa directors recommend unanimously that shareholders vote in favour.