Carpetright plc (LON: CPR) have agreed a takeover deal with Meditor, who are their largest shareholder.
The bid value was reported to be around £15.2 million and was significantly less than what shareholders valued the UK textiles firm at.
Carpetright saw their shares collapse a fortnight ago, and reports suggested that seniority were pondering the potential of a takeover deal.
Shares in Carpetright rallied 14.96% after the Friday announcement to 4.8p. 15/11/19 12:02BST.
The pair were in talks last month as Carpetright sought ways to raise £80 milion to pay off £56 million in debts and give it enough cash to grow the business.
Carpetright chairman Bob Ivell said: “We believe the MHL offer is in the best interests of all stakeholders.
“While we have made significant progress with our recovery plan for the Carpetright group, our ability to invest in the future of the business has been constrained against the backdrop of limiting banking covenants and a very challenging consumer market.
“With a recapitalised business and the backing of a committed new owner with the resources to invest in Carpetright for the long term, we will be able to complete our recovery in the private arena and emerge as a stronger business.”
Investment manager and poker player Talal Shakerchi, who owns Meditor, added: “With Meditor’s support and financial backing and without the constraints of a public market listing, Carpetright will be well positioned to compete more effectively.
“This will facilitate substantially increased investment in Carpetright’s committed employees and its store estate as well as driving new initiatives and improvements. I am excited about the long term prospects and opportunities for the Carpetright business.”
Many firms have struggled to stay afloat in testing waters on the British high street.
In a tough business environment, the struggles of Marks and Spencer (LON: MKS) and Sainsbury’s (LON: SBRY) have been reported, and the takeover bid for Carpetright will give relief to shareholders that the company did not descend into administration similarly to Mothercare (LON: MTC).
