Sprue Aegis rejects “unwelcome, highly opportunistic” takeover bid

THE directors of Coventry-based safety products manufacturer Sprue Aegis have rejected the takeover bid from BRK Brand Europe, dismissing it as “wholly unadequate”.

Smoke alarm supplier BRK is one of Sprue Aegis’s major shareholders and launched its takeover bid at the end of April.

But in a detailed response to the offer, Sprue Aegis’s independent directors have set out their reasons why shareholders are being advised to reject the offer.

The statement said: “The independent directors strongly believe that BRK’s Offer does not represent fair value and that Sprue Shareholders should reject the offer as BRK’s offer fundamentally undervalues the company; 90p per share is wholly inadequate.”

The statement suggests that due to illiquidity the company’s share price does not reflect fair value and that significant contact wins underpin future growth.

To improve the liquidity and effect a re-rating in the company’s shares, the directors are committing to seek shareholder support to move Sprue’s listing to AIM within 12 months.

Sprue has received letters of intent not to accept BRK’s offer from certain Sprue shareholders, including the independent directors and members of their immediate families, representing in aggregate approximately 52% of the company’s issued share capital.

Graham Whitworth, chairman and CEO of Sprue, said: “As Sprue shareholders, we have taken the risk as we built the business and just as the company is well positioned for significant growth, BRK wants to take our share of the rewards with an inadequate offer.

“BRK’s offer is unwelcome, highly opportunistic and at just 90p per share, fundamentally undervalues the company.

“For these reasons, the independent directors do not intend to accept BRK’s offer and recommend that shareholders continue to reject the offer.”