Buyout firm confirms interest in Spice
LEADING European buyout firm Cinven has confirmed its interest in utility services provider Spice.
The firm, which has offices in London, Paris, Frankfurt, Milan and Hong Kong, disclosed that it approached the board of Yorkshire-based Spice in May.
Cinven’s approach indicated a possible offer price of 56p per share in cash for the entire issued and to be issued share capital of Spice subject to due diligence and the board’s recommendation.
This represented a 51.4% premium to the share price at the close of business on May 21 – the last business day before Cinven approached Spice.
In a statement Cinven said it believed that the level of the indicative offer represented a significant premium for both the value of Spice’s businesses and the recovery value from executing the strategic review being undertaken by Spice’s management.
However, the approach was rejected and there are currently no discussions taking place between Cinven and Spice.
Spice said it believed the approach “significantly undervalued” the business.
In a statement Spice said: “The board believes that the approach from Cinven is opportunistic and significantly undervalues the company.
“Spice is trading in line with the board’s expectations,and our priority remains enhancing shareholder value. The board is confident that Spice can deliver significant value to shareholders over the medium term.”
Over the past few months Spice has been busy re-aligning its business with the disposal of its loss making gas business announced last week.
Spice said the sale to Booth Securities,would result in the “elimination” of a business, which chief executive Martin Towers described as a “drain on resources”.
Leeds-based Spice, which sold its telecoms business Team Telecoms Group in a £32.8m deal aimed at reducing the group’s debt last month, said the latest disposal would allow it to focus on its supply and distibution businesses.
Booth Securities did not pay anything for the business, which maintains and repairs gas boilers and heating systems.
