Consortium proposes £262m takeover of funeral provider Dignity
Dignity, the funeral care provider, has said it is in advanced talks with a consortium looking to takeover the company.
The Sutton Coldfield firm said it has received unsolicited proposals in October and November from a joint venture between SPWOne V and Castelnau Group named Yellow Bidco. The financiers comprise of Direct Line founder Sir Peter Wood and Gary Channon, former CEO of Dignity who already has 29% of its share capital.
The latest proposal stands at 525 pence in cash per Dignity share, an offer which values the company at £262m. The board says the price is at a level that it would recommend to shareholders.
The price is at a 23.4% premium to Dignity’s closing price of 425.5p as of 3 January 2023, which was the last trading day before the release of the announcement.
It’s a 32.4% premium to Dignity’s closing price of 396.5p as of 11 November 2022, which was the last trading day before a preliminary agreement was reached between the parties on price.
The proposal is an increase of more than 10% compared to the first proposal. It also includes the option for Dignity shareholders to stay invested in Dignity through an unlisted share alternative in Valderrama or a listed share alternative in Castelnau – a listed investment vehicle part of the consortium.
Sir Peter Wood, founder of Direct Line, Gocompare.com and now SPWOne V said: “Dignity has long-term growth potential – the signs are clear to me. But the changes and significant development work and investment needed to enable this growth mean the best way forward for Dignity is as a private company”.
Gary Channon, CIO of PAMP and former CEO of Dignity
Gary Channon, CIO of PAMP and former CEO of Dignity added: “We strongly believe that the changes needed to unlock the potential of Dignity are better implemented as a private company. Shareholders who want to stay invested could do so through the private holding company Valderrama, or via the London-listed investment fund Castelnau. Shareholders who want immediate liquidity can take cash for their shares at a 23.4% premium”.
The consortium first approached Dignity on 13 October 2022 in relation to a cash offer of 475 pence per Dignity share, which was a 37.1% premium to the closing share price of 346.5 pence per Dignity share on 12 October 2022.
