US private equity group Lovell Minnick has increased its takeover offer for Charles Taylor (CTR) in order to fend off a competing bid. The terms of a 315p-a- all-cash acquisition had already been agreed back in September. Now, Lovell Minnick has sweetened the deal to 345p a share, representing a 47 per cent premium to the 235p closing price on the day before the original offer was made. The new offer values Charles Taylor at around £285m.
The insurance services provider had previously received “a number of unsolicited approaches” from interested parties with which it had engaged in discussions. With Charles Taylor finding Lovell Minnick’s proposition the most attractive, these talks were subsequently terminated. However, with one of those rival suitors returning to the table with a higher bid (the value of which has not been disclosed), the private equity group was forced to up its offer to seal the deal. As allowed by the Takeover Code, Charles Taylor has not named the rival bidder. But the party in question must clarify whether it intends to make a firm offer by the close of play on 15 November.
Lovell Minnick believes Charles Taylor will achieve better growth as a private entity, unencumbered by the “costs, constraints and distractions” of a public listing. The revised offer has retained the recommendation of Charles Taylors’ board, which holds an aggregate 1.2 per cent of the issued share capital. Considering the terms “fair and reasonable”, the directors are advising that shareholders vote to accept the deal on 22 November. The Standard Club, which holds a 7.76 per cent stake, has signalled its intention to vote in favour of the scheme of arrangement.
