LONDON: FirstCash Holdings Inc. has raised its takeover bid for Ramsdens Holdings PLC to as much as 684 pence per share, the companies announced Wednesday, and declared the new price final barring a rival bidder or regulatory approval.
The revised cash offer, up from an initial 600 pence per share agreed June 23, values Ramsdens’ full share capital at up to approximately £232 million on a fully diluted basis. The deal is being carried out through Chess Bidco Limited, an indirect wholly-owned subsidiary of the Texas-based pawnbroking and retail company, and will proceed by a court-sanctioned scheme of arrangement under the Companies Act 2006.
Under the new terms, shareholders will receive 675 pence per share in cash plus up to 9 pence per share tied to previously declared dividends — a 6-pence interim dividend and a 3-pence special dividend, both declared June 3 and expected to be paid Oct. 9. If the deal closes before those dividends are paid out, the cash offer will rise by the unpaid amount.
The 675-pence cash price is 13% above the original offer and represents premiums ranging from 49% over Ramsdens’ closing share price the day before the initial announcement to 78% over the stock’s 12-month volume-weighted average price. It also sits 37% above the company’s all-time high closing price, reached June 3.
Including the dividend payments, the total value to shareholders rises to as much as 684 pence per share, or about £232 million in aggregate.
Bidco said it would not raise the offer further, except if a competing bidder emerges or UK takeover regulators grant an exception under “wholly exceptional circumstances.”
Financing
FirstCash said it plans to draw on its U.S. revolving credit facility to fund the acquisition, including repayment of Ramsdens’ existing debt. As a backstop, Bidco, FirstCash and Jefferies Finance LLC amended a bridge loan agreement, originally dated June 23, on July 16 to provide up to £239 million in borrowings. Jefferies, acting as financial adviser to Bidco, confirmed sufficient resources are available to cover the cash consideration.
Shareholder Support
Ramsdens directors holding roughly 4.09% of the company’s shares have irrevocably committed to vote in favor of the deal. Separately, Lion Nominees Limited, acting for TrinityBridge Limited, and Downing LLP have issued letters of intent covering about 13.16% of shares. Combined, Bidco has secured commitments representing approximately 17.25% of Ramsdens’ issued share capital as of July 15.
Board Recommendation
Ramsdens’ board, advised by Cavendish on the financial terms, continues to unanimously recommend that shareholders back the deal. The company also released a trading update Wednesday that revised its previously announced profit forecast, which Ramsdens said shareholders should review.
FirstCash’s strategic rationale and plans for Ramsdens’ employees, pensions, operations and locations remain unchanged from the original announcement, the companies said. A formal scheme document detailing the transaction will be published and sent to shareholders in the coming weeks.
