Struggling fire alarm manufacturer Fire Angel Safety Technology Group PLC (AIM:FA.) has agreed to a rescue takeover from Singapore-based Intelligent Safety Electronics (ISE).
In September, the AIM-listed company warned that there was a material uncertainty over its future, cash and banking covenants.
ISE already owns a 17.5% stake in the business and has offered to buy the outstanding shares for 7.4p each, valuing the group overall at £27.7 million.
In a statement, ISE said: “The highly competitive market environment in which FireAngel operates and the heightened global macroeconomic challenges have generated headwinds for both FireAngel and its share price.
“The board of ISE believes that the offer provides a certain path to recover lost value for FireAngel shareholders and an immediate and compelling proposition for all stakeholders.”
Andrew Blazye, FireAngel’s chairman, added: “The board is very mindful of the continued trading challenges the group faces in the medium term and believes this offer by ISE represents an opportunity for shareholders to realise a return, in cash, at a significant premium to FireAngel’s current prevailing share price.
“FireAngel has a longstanding relationship with ISE through Siterwell, initially as a valued manufacturing partner and more recently as a major shareholder, and the board is confident that it can provide a supportive environment for FireAngel’s long-term success.”
Shares rose 209% to 6.5p.