Shares in Kitwave Group PLC (AIM:KITW) jumped 34% to 297p after the board of the wholesaler agreed to £251 million cash offer from US private equity firm OEP Capital Advisers.
Under the deal, shareholders in the UK wholesaler, which floated on AIM in 2021 at £105 million, will receive 295p in cash per share.
While this represents a 33.5% premium to the closing price of 221p yesterday, it is below levels seen as recently as last year, when the shares topped 330p, and in 2024 when they traded above 300p for most of the year.
However, a profit warning was issued last summer due to extra short-term investment in a new depot, an increase in employer National Insurance contributions and lower sales volumes to the leisure sector.
Kitwave’s board has unanimously recommended the offer, and directors holding 5.2% of the company have irrevocably undertaken to vote in favour of the scheme.
Including other shareholder commitments, there is support equivalent to 21.6% of the issued share capital.
The acquisition is expected to be completed in the first quarter of 2026, subject to shareholder and court approvals.
Ben Maxted, Kitwave's CEO, said: "Since becoming a public company in 2021, Kitwave has rapidly transformed from a regional foodservice operator into an enlarged UK-wide delivered wholesale business.
"OEP has an excellent track record of helping businesses like Kitwave to significantly scale and the board believes that becoming a private company will provide greater financial flexibility to achieve its ambitions."
** UPDATE: Adds share price details **