The board of Charles Taylor (CTR) is backing a £261m takeover bid by US private equity firm Lovell Minnick. At 315p per share, the cash offer represents a 34 per cent premium to the insurance services providers’ closing price of 235p on 18 September.
The proposal comes a little over a week after half year results, in which the group said it was “well placed to deliver further growth and greater shareholder value”. Posting narrower pre-tax losses in the six months to 30 June, it saw improved margins in claims services and approached the break-even point in its insurance technology business. Lovell Minnick believes that future growth is more likely to be maximised “without the costs, constraints and distractions associated with being a listed company”.
Holding an aggregate 1.16 per cent of the group’s issued share capital, Charles Taylors’ directors have described the deal as “fair and reasonable”. They are recommending unanimously that shareholders accept the offer. It will be put to a vote at the court and general meetings in November, requiring at least 75 per cent approval to pass. Subject to clearing the relevant antitrust and regulatory hurdles, the deal would complete in early 2020, with a long stop date on proceedings of 19 March. The 3.65p interim dividend will still be paid.
