Dignity’s shares rocket 8 per cent following £281m deal which would take funeral firm private
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Listed funeral firm Dignity is set to become a private company after striking a deal to sell itself to a group of investors.
The £281m cash offer, from a consortium of buyers comprising of SPWOne V Limited, Castelnau Group and Phoenix Asset Management, represents a 29.3 per cent premium on the firm’s closing price on the 3 January, before the offer period started.
The three buyers already held a 29 per cent stake in Dignity and said the deal would allow them to pump significant cash into Dignity’s growth.
In a statement the consortium said: “Bidco believes that Dignity’s strategy will be enhanced through access to a significant level of investment to expand organically through increased marketing investment in its new funeral plan products, upgrading and modernising of physical infrastructure, further investment in its workforce and technology, and strategic expansion of its crematoria portfolio.”
“Bidco will also provide Dignity with the financial support to grow inorganically by taking advantage of acquisition opportunities as they arise at attractive prices, given the current uncertain market environment. “
Announcement of the deal sent shares in Dignity rocketing beyond eight per cent this morning to trade at around 546p per share.
The firm is trading down over 19 per cent over the past 12 months but shares have now jumped more than 28 per cent since the start of the year, after Dignity revealed it was in advanced talks with the consortium following two unsolicited buyout proposals from the same group in October and November.
The deal has included the option for Dignity’s existing shareholders to stay invested in the company through an unlisted share alternative in Valderrama, an indirect parent company of bidding company Yellow (SPC) Bidco Ltd, or a listed share alternative in Castelnau.