UK buy a first for Glen Dimplex
Glen Dimplex is making its first acquisition of a public company with a recommended £11.9 million sterling (€19.5 million) bid for the Stoves Group in Britain. Since the target is a public company, it is also the first time Glen Dimplex has disclosed how much it has paid for an acquisition.
Glen Dimplex already has shares, irrevocable acceptances and statements of intent to sell covering 54.6 per cent of Stoves stock and its bid seems assured of success unless a higher offer emerges.
It manufactures gas and electric cookers under the Stoves and New World brands and had sales of £101.9 million sterling in the year to last May. Pre-tax profits, however, were no more than £55,000 sterling - indicating the difficulties Stoves has had to endure, mainly due to sterling's strength. In the previous year, Stoves had pre-tax profits of £865,000 sterling on sales of £100.3 million sterling.
Glen Dimplex is offering 45p sterling a share to Stoves's shareholders, a 27 per cent premium on the previous price in the market and a long way above the 18p low earlier this year. The offer is also a 40 per cent premium on the three-month average to the end of November for Stoves's shares.
Glen Dimplex chairman Mr Martin Naughton said: "The combination of Stoves and Glen Dimplex further enhances our strategy of seeking leading positions in each of the key markets in which we operate." It is clear that Glen Dimplex plans a radical shake-up after the acquisition is completed. The Irish group plans a detailed review to see how Stoves's performance can be improved.
Glen Dimplex chief executive Mr Sean O'Driscoll said Glen Dimplex did not yet have a plan, having conducted a limited due diligence on the company. "We've satisfied ourselves that this a good business proposition . . . we believe that we can turn this company around."