Kitwave Group shares surged on Thursday after announcing has agreed to a recommended £251 million cash takeover by US private equity group OEP Capital Advisers in another blow to London’s equity markets.
Under the terms of the offer, Kitwave shareholders will receive 295p per share in cash. Kitwave shares quickly moved to the takeover price of 295p on Thursday, trading 33% higher on the day.
The price represents a 33.5% premium to Kitwave’s closing share price of 221p on the last practicable date, and a 38.8% premium to the three-month volume-weighted average price of 212p.
However, the offer price is significantly below the group’s 2024 highs above 400p.
Kitwave’s board, advised by Canaccord Genuity on the financial terms, has unanimously recommended that shareholders vote in favour of the scheme. Directors holding approximately 5.2% of the company’s share capital have given irrevocable undertakings to support the transaction.
Kitwave announced a profit warning in July last year, and shares have never recovered. The takeover looks to be an easy way out for management, who are struggling with a challenging economic backdrop.
US smart money obviously sees more value in Kitwave than the UK’s public markets are willing to give it.
OEP said the acquisition represents an opportunity to support the growth of one of the UK’s leading delivered wholesale groups. The private equity firm cited Kitwave’s nationwide network, strong supplier relationships, modern logistics infrastructure and diverse customer base as key attractions.