UK B2B telecoms provider Daisy has agreed to a £494m (US$796.7m) takeover by a consortium led by its CEO Matthew Riley.
Under the terms of the offer announced last week, the consortium, which also includes Toscafund Asset Management and Penta Capital,…
UK B2B telecoms provider Daisy has agreed to a £494m (US$796.7m) takeover by a consortium led by its CEO Matthew Riley.
Under the terms of the offer announced last week, the consortium, which also includes Toscafund Asset Management and Penta Capital, will pay £1.85 (US$2.98) per share.
This represents a 16.4% premium on the closing price on 25 July, the last business day before the consortium approached Daisy, and a 14.7% premium on the company’s closing price last Friday.
The consortium had contacted Daisy about a potential £1.90 per share offer in August, but reduced it to £1.85 last week.
The price tag values Daisy at about 11 times its adjusted EBITDA of £57.9m (US$93.4m) for the 12 months ended 31 March 2014, according to a statement from the consortium and Daisy’s independent directors. It also implies an equity value of about 13.4 times Daisy’s adjusted EPS of £0.14 for the same period.
The consortium has created a new company, Bidco, to acquire 93.79% of Daisy shares.
At present, Riley, who has led Daisy since founding it in 1991, has a stake of about 23% in the telco, while Toscafund holds 28.5%. These shares will be transferred to Bidco.
Daisy’s independent directors intend to recommend shareholders accept the offer, which they say is fair and reasonable. Daisy directors other than Riley, who together own about 1.16% of shares, have already agreed to accept it.
Bidco has also received irrevocable undertakings from Host Europe, Invesco Asset Management and Woodfood Asset Management, who have a combined stake of about 39.65% in Daisy, to accept the offer.
The offer is conditional upon Bidco receiving acceptances representing at least 90% of Daisy shares. If this happens, Bidco will exercise its right under the UK Companies Act to acquire all remaining shares under the same terms as the offer.
The consortium intends for Daisy to apply to the London Stock Exchange to cancel its admission to trading on AIM once acceptances have been received. This is likely to significantly reduce the liquidity and marketability of shares which have not been tendered, the statement read.
Bidco will then seek to re-register Daisy as a private limited company.
Daisy senior independent director Christina Kennedy described the agreement as a good outcome for Daisy shareholders which enables them to exit at a premium for cash.
Liberum is providing financial advice to Daisy’s independent directors on the deal, while Oakley Capital Corporate Finance is the company’s financial adviser. The consortium is advised by JP Morgan.
Daisy, which provides hosting, broadband internet and voice services, reported revenues of £352.68m for the year ended 31 March 2014 and an operating loss of £17.86m.
