The board of flavour and fragrance ingredients maker Treatt PLC (LSE:TET) has thrown its support behind an increased and final takeover offer from Natara Global, a company controlled by private equity group Exponent.
Natara has raised its bid to 290p a share, up from the 260p offer made in early September. The new price values Treatt at about £173.8 million, 11.5% more than the previous proposal and nearly 30% above the company’s closing share price before the first bid was announced.
Treatt’s directors, advised by Peel Hunt and Investec, said they now “consider the terms of the increased cash offer to be fair and reasonable” and will unanimously recommend that shareholders vote in favour of the deal.
The new proposal follows weeks of talks between Natara, Treatt’s management and key shareholders.
Exponent, which manages the funds backing Natara, said the higher price “represents full and fair value” for the business, while offering “speed and certainty in an uncertain market environment”.
Natara has also won further backing from investors. It has secured new irrevocable undertakings and a letter of intent covering around 4.2% of Treatt’s shares, including those held by the company’s directors and former finance chief Ryan Govender.
Funding for the deal will come from Exponent’s Fund IV and Fund V, together with new debt facilities.
The acquisition will be carried out through a “scheme of arrangement”, a court-approved process often used for UK takeovers. Regulatory clearance has already been received from Ireland’s competition authority, with remaining approvals expected to follow.
Natara said the higher offer was final and would not be raised further unless a rival bidder emerges or the Takeover Panel consents.
Treatt, founded more than a century ago, supplies natural ingredients to the food, drink and fragrance industries.
Its shares, down 35% in the last year, have come under pressure amid fluctuating commodity costs and weaker demand, prompting speculation about potential bidders over the summer.