Colt rejects Fidelity cash offer, Fidelity confirms offer price is final
The independent directors of Colt Group have rejected a cash offer for the ordinary shares in Colt not already owned by Fidelity at a price of 190 pence per share. Fidelity said the Offer price will not be increased under any circumstances.
The independent directors of Colt believe that the Offer undervalues the Company and its prospects and accordingly the independent directors, having been so advised by Barclays, consider that the financial terms of the Offer are not fair to the independent shareholders of Colt. The independent directors believe that the financial terms of the Offer may be considered by some shareholders to be acceptable in the circumstances, and accordingly make no recommendation to shareholders whether or not to accept the Offer.
Over the course of 2015, the management of Colt has been working on a plan to refocus the Company’s activities and significantly improve its financial performance (the New Business Plan). The Board has provisionally approved the New Business Plan and further details will be announced in due course.
The independent directors’ assessment of what can be achieved through delivery of the New Business Plan has been an important factor in reaching the conclusion that the Offer undervalues the Company and its prospects. The independent directors also believe that a sale of the Company to a third party purchaser could potentially achieve a price significantly higher than the Offer. However, the independent directors note the commitment by Fidelity that it will not sell or take any other steps to dispose of its Colt Shares to any third party prior to 31 December 2016, and believe that without a change of approach by Fidelity there is no prospect of obtaining that additional value for shareholders.
The independent directors recognise that some shareholders may prefer the certainty provided by a cash offer now and accordingly, if requested by Fidelity, the independent directors will facilitate the Offer by convening a meeting of the shareholders to consider the resolutions required to implement the Offer and, if those resolutions are passed, will agree to the termination of the Relationship Agreement.
Fidelity has confirmed in a statement that the offer price of 190 pence per share is final: The Offer Price will not be increased under the Offer under any circumstances. As described in the Offer Announcement, Lightning Investors Limited (an entity jointly owned by FMR and FIL through which the Offer will be made) has received irrevocable undertakings to accept or procure acceptance of the Offer at the Offer Price from certain Colt shareholders.
Fidelity has committed to holding its investment in Colt and not to sell or take any other steps to dispose of its Colt shares to any third party prior to 31 December 2016. This commitment stands whether as a consequence of the Offer Colt becomes a private company, or remains as a public listed company should the Offer lapse.
The Offer is not regulated by the U.K. Panel on Takeovers and Mergers. However, Fidelity will stand by these statements as if the U.K. Takeover Code applied and has not qualified either statement in any way.
Source: AutomatedTrader – Colt rejects Fidelity cash offer, Fidelity confirms offer price is final
