API says ‘sit tight’ after shock bid
THE largest shareholder of AIM-listed North West packaging products manufacturer API Group has tabled a 60p per share cash takeover offer.
The bid on Thursday morning from US based investor Steel Parners Holdings, which already owns more than 32% of API, appeared to take the board of the Stockport-based group by surprise.
A brief statement released several hours later urged investors to take no action regarding the offer, which Steel made through a vehicle called Cedar 2015 Bidco.
Cedar said its offer is at a 27% premium to API’s share price of 47p on Wednesday.
It has received support from other API investors, representing 62% of the stock, and now plans to “engage in detailed discussions with the API board.”
Terry Gibson, chairman of Cedar Bidco said in a letter to shareholders: “The Steel Group is pleased to present this opportunity to API shareholders in order to allow them to sell their shares in what has generally been an illiquid investment at a significant premium to the current share price.”
Referrring to the API board’s previous rebuffal of an approach by Steel in 2013, Mr Gibson said:
“On February 13 2013, the API board announced that whilst indicative proposals had been received, none gave “sufficient recognition for the underlying value of the business or to deliver best value for shareholders”.
“In the period from February 12 2013 to January 21 2015 (being the last business day prior to the date of this announcement) API’s share price fell by 32% from 69p to 47p and underperformed the FTSE All-Share Index by 40%.”
In a short statement API said: “The API Board will carefully consider its position and a further announcement will be made in due course.
“The API board strongly recommends that API shareholders take no action at present and await further developments.”
