The acquisition of the entire share capital of Rotala PLC by a number of existing directors and associates looks set to take place, with shareholders likely to accept the offer
There has been progress towards the acquisition of Rotala PLC by the newly-formed Rotala Group, a newly incorporated entity directly and indirectly owned and controlled by Simon Dunn, Robert Dunn, John Gunn, the spouses of Simon Dunn and Robert Dunn, and Wengen Pension Plan. An initial announcement was released by Rotala on 19 September regarding a possible cash offer for the company, and the boards of RGL and Rotala now say that they reached agreement on the terms and conditions of a recommended acquisition under which Rotala Group (RGL) will acquire the entire issued and to be issued share capital of Rotala PLC.
Simon Dunn is the current Chief Executive, Robert Dunn holds the position of Managing Director (North West), and John Gunn is Non-Executive Chairman. Under the terms of the acquisition, each Rotala shareholder will be entitled to receive 63.5p in cash, valuing the company at approximately £23.5 million. RGL’s directors said that they believe that Rotala’s AIM quotation no longer represents good value for Rotala and its shareholders, providing limited share price growth and access to equity capital while incurring material costs and carrying a regulatory burden. In addition, they believe that the lack of liquidity in the Rotala shares, and the perceived desire of many shareholders to seek an exit from their investment has acted as a restriction to both the company’s share price potential and its ability to raise funding by the issue of new shares to support new opportunities for growth.
The Directors therefore see the acquisition of Rotala as an opportunity to allow them to invest to support its growth potential as a private company, combined with providing an attractive cash return to its shareholders.
Commenting on the Acquisition, Simon Dunn said: “We are excited about the opportunity for Rotala as a private company, without the regulatory and cost burdens associated with an AIM quotation, which will allow us to operate in a more agile way. We believe that the acquisition also provides a much-needed liquidity event for Rotala shareholders.” Deputy Chair and Senior Independent Director of Rotala Graham Spooner added: “The Rotala Independent Directors are pleased to recommend RGL’s offer of 63.5 pence in cash for each Rotala share which represents a significant premium to both the Rotala share price before commencement of the offer period and the tender offer price per share.”