Ten Entertainment Group PLC (LSE:TEG)'s share price rose 31.45% during early trading after the company said it had agreed to a takeover bid from US private equity firm Trive Capital Partners LP.
The Texas-based investment firm made a cash offer to buy the bowling resort company for 412.5 pence per share through a bidco, Neo Buyer Ltd.
The offer has been recommended by Ten's board.
The acquisition price represents a premium of 46.3% to the volume-weighted average price of 281.9 pence for every share in Ten over a six-month period, and a nearly 50% premium to the average price over the past year.
That is more than double its initial public offering (IPO) price of 165 pence per share, when it listed on the London Stock Exchange in April 2017, and a third higher than its closing price yesterday.
The take-private values the bowling company’s entire issued, and to be issued, ordinary share capital at approximately £287 million on a fully diluted basis.
The price therefore implies a multiple of approximately 7.3 times its adjusted underlying earnings (EBITDA) after rental costs for the year to July, the companies said.
Ten added that its operational performance has been “in line” with directors’ expectations since the start of the year.
The purchase is expected to help the company to expand its footprint of bowling sites through strategic investment.
Ten's share price climbed to 407.50p this morning, a rise of 31.45% on its closing price yesterday.