After a series of profit warnings, the management of engineering parts distributor Brammer PLC (LON:BRAM) is recommending a cash offer from private equity.
The company, whose new chief executive Meinie Oldersma instituted a strategic review in August after another bleak trading update, is throwing in the towel and recommending shareholders accept a 165p per share cash offer from a company backed by Advent International.
Shares shot up 68p to 165.5p on the news.
The terms value Brammer at around £221.5mln.
The company said the recent strategic review of had confirmed a number of key strengths of the Brammer Group but also identified a number of material operational issues and the key actions needed to address these issues. Management decided those key actions would be better taken as a private company.
"The board of Brammer has evaluated the offer in the context of the strategic, operational and financial issues highlighted by the business review and the nature, extent and timescale of the actions needed to address these issues. Accordingly, the board is unanimously recommending the offer, which represents an opportunity for Brammer shareholders to realise value for their investment in cash at an attractive premium to the current share price,” said Brammer’s chairman, Bill Whiteley.
“Advent is a leading global private equity firm, and its proposal provides a high degree of certainty for Brammer's shareholders, employees and customers," he added.