Portuguese bidder in final and improved offer for Lancashire paper group, Accrol

Portuguese paper manufacturer, Navigator, has upped its bid for Blackburn-based tissues maker, Accrol Group, in its final offer.

On March 22, it launched its approach for the business with a £127.5m offer which was recommended for approval by the Accrol board.

It said there were strong operational reasons to accept the Navigator offer, such as joining a larger integrated group, with paper and pulp making capacity, that would allow Accrol to continue to improve and maintain margins and win larger wallet share from the largest UK retailers by being an integrated supplier, benefiting from the capabilities, scale, network and resources of the Portuguese business.

Today (May 3), Accrol announced it had received an updated and final offer from Navigator, valuing the business at £130.8m. It implies an enterprise value of approximately £188.2m.

The increased offer price represents a premium of approximately:

• 14.7% to the closing price of 34p per Accrol Share on March 21, being the last business day before the commencement of the offer period
• 32.1% to the volume weighted average price per Accrol share during the six-month period ended March 21, 2024, and
• 26.4% to the volume weighted average price per Accrol share during the 12-month period ended on March 21, 2024.

The Accrol board has confirmed that it has not received any other offer for the business since the orignal Navigator approach.

Accrol CEO, Gareth Jenkins, said: “As set out in the scheme document, the Accrol board believes that the supply dynamics in the UK are set to change in the coming years with circa 500k tonnes of integrated capacity entering the UK market making the UK market significantly more competitive.

“The Accrol board believes that the increased and final offer and being part of a vertically integrated group invested into pulp and tissue manufacturing capacity represents significant value for shareholders against a back drop of increasing pulp and tissue prices and a very different and challenging future environment.”

The Accrol directors, who have been advised by Stifel, recommend unanimously that scheme shareholders vote in favour of the scheme.

Accrol directors, who hold Accrol shares, have irrevocably undertaken to vote in favour in respect of their own interests in Accrol shares, amounting, in aggregate to approximately 5.4% of the total issued share capital as at May 2, 2024.

A Court Meeting and General Meeting are scheduled for May 15, when shareholders will be able to make their choice.

If approved, the cancellation of admission of Accrol Shares to trading on AIM, could take place on May 28.