Cinven ups Spice offer as second bidder emerges

UTILITY support services group Spice confirmed it is in “advanced discussions” over a potential improved offer for the company from private equity firm Cinven.

Cinven has indicated it is ready to improve its offer for the company for a second time to 70p per share. Spice’s share price closed at 63.25p on Wednesday, up almost 12%, after it announced a second potential bidder for the company had emerged.

In June, Spice revealed it had received an approach for the company from Cinven at 56p per share, which it subsequently raised to between 62p and 65p per share.

The company told the stock market: “Although the board of Spice believes that the company has a strong future as an independent business, it recognises that, due to the cash nature and premium of the potential offer, it is in shareholders’ interests to facilitate further discussions with Cinven. 

“Accordingly, subject to the final terms and conditions of the offer, the board intends to recommend the offer of 70 pence per share from Cinven, if made.”

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In a trading update yesterday Leeds-based Spice said it was expecting a strong performance in the second half of the year on the back of “higher activity levels” and cost reductions. It put its exposure to the public sector, which is facing major spending cuts, at just 2% of revenues.

Among its trading highlights, the company pointed to a new contract for extra high voltage work from CE Electric on the electricity distribution networks operated by YEDL and NEDL.

The water business also traded ahead of expectations thanks to business from customers including Yorkshire Water.

Spice said it had received a “conditional proposal” from another potential offeror.