Arrow Global to recommend latest TDR offer, valuing business at £563m

Jonathan Bloomer

Manchester-based debt purchaser Arrow Global has agreed to recommend the latest approach by suitor TDR Capital, valuing the business at £563m.

Directors said they consider the 307.5p per share offer to be “fair and reasonable” and will recommend shareholders to accept the bid from TDR, which worked with Blackburn’s Issa brothers on their recent £6.8bn takeover of supermarket group Asda.

Jonathan Rosen, of TDR Capital, said: “Arrow is a company that we have followed for some time, and its position as a clear market leader is due to the strength of the team they have built.

“We are excited to partner with them to accelerate their strategy to build a market leading fund management business by providing the investment and support needed, all of which we believe is better facilitated as a private company.”

The private equity group had pursued Arrow Global for four months, submitting five different offers, starting with a 250p per share approach in December, before Arrow decided the price was right.

Arrow chairman Jonathan Bloomer said the offer is “in the best interests of shareholders”.

He added: “I am proud to have been chair of Arrow for the last seven years and it has been a pleasure to work with so many dedicated individuals who have made Arrow a leading European investor and asset manager in the non-performing and non-core assets sector.

“For now, it is business as usual, and I thank all our people for their continued dedication and hard work.”

Last week Arrow Global published its annual results for the year to December 31, 2020, which revealed it had swung into a loss after lockdown restrictions across the UK and Europe affected cash collections and portfolio acquisitions.

A pre-tax loss of £114.8m compared with a £51.3m profit in 2019.

The group reported cash collections of £338.9m, also down from £442.3m in the prior year.

Despite the fall into loss, Arrow said it had managed to be cash positive with liquidity headroom of £174.6m.

Chief executive Lee Rochford said: “Despite the disruption from COVID-19, the group performed resiliently in 2020.”