Carpetright said today it had agreed to be taken private by its largest shareholder Meditor, which values the debt-laden company at £15.2 million.
Shareholders of the struggling floor coverings retailer will receive 5 pence per share in cash, representing a premium of 18% to Thursday's close of 4.245 pence.
The offer price was unchanged from the first proposal when talks were announced in October. At that time the company's stock fell 50% as the offer was at a 44% discount to the company's closing price the day before.
The company, which has about 330 stores throughout Ireland and the UK, has been struggling for years and fought off its collapse last year by entering a Company Voluntary Arrangement (CVA) restructuring that closed shops and reduced rents.
Meditor Fund, which has a 29.9% stake in Carpetright, intends to provide about £80 million of long-term capital to the company to repay debt, meet ongoing working capital requirements and provide capital to execute its strategy.
Carpetright's net debt stood at about £27 million as at Oct. 26, compared to its market cap of about £12.9 million.
Carpetright said the acquisition is not expected to lead to material job losses, but some redundancies are expected from its ongoing store portfolio realignment in the UK and Ireland.
"The board believes that the offer (from Meditor) is the only viable route to deliver its requirements for a deliverable, controllable solution to the long-term funding required to make Carpetright a sustainable business," the company said.
Before Friday's announcement, Carpetright's combined credit score - which measures how likely a company is to default in the next year on a scale of 100 (very unlikely) to 1 (highly likely) - was "1", Refinitiv Eikon data showed.
Panmure Gordon served as financial adviser to Meditor, while Carpetight was advised by Peel Hunt. (Reuters)