Our long-standing buy tip Hangar 8 (HGR8) has announced a proposed reverse takeover of the company by larger rival Gama Aviation. The deal puts an £82m price tag on Gama and the enlarged company - which will retain its London listing - will take on Gama Aviation's name and command a market capitalisation of roughly £120m. The deal will include two placings. One will be raise £17m selling 6.1m new shares at 280p apiece and the another plans to raise £5.8m for Hangar 8 chief executive Dustin Dryden, and other Gama Aviation vendors who will be selling 2.1m shares between them.
Marwan Khalek, chief executive of Gama Aviation, said the motivation for the merger was "clear to see". The two businesses operate across similar geographies and have been pursuing "similar growth strategies" over the last few years.
The deal will certainly be transformative for Aim minnow Hangar 8, which currently has a market capitalisation of just £28m. Chief executive Mr Dryden said the company had "achieved much in its short history" but said the enlarged group would be "firmly placed" on "the podium of global private aviation companies".
