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Afarak Group to consider request to implement a tender offer to shareholders

Published: 12:32 21 Sep 2018 BST

Euros
LNS reckons the cash consideration of any such offer should be at least €0.90 per share and not more than €1.15

A substantial shareholder in Afarak Group PLC (LON:AFRK) has asked the group to convene a meeting to authorise the directors to repurchase the company’s shares.

LNS Ltd, which controls more than 10% of the voting rights at Afarak, is proposing a scheme that would enable larger shareholders to offload their holdings, should they wish.

Move to allow larger shareholders to exit​

LNS’s view is there is not enough liquidity in the Helsinki and London Stock Exchanges to allow larger shareholders to exit, so Afarak should offer to buy them out.

LNS reckons the cash consideration of any such offer should be at least €0.90 per share and not more than €1.15; in Helsinki, Afarak’s shares closed at €0.78 and rose to €0.80 following LNS’s proposal.

LNS proposes that the total amount of cash consideration to be paid by Afarak be limited to €28.4mln but said the board should, at its discretion, have the right to waive this limitation.

As an alternative to doling out cash, LNS has suggested that Afarak Group plc shareholders should receive Afarak Holdings Ltd shares on a one-for-one basis.

After the execution of proposals, Afarak Group would have only those shareholders remaining who have either decided to continue as current shareholders in Afarak or who alternatively have decided to transfer to be new shareholders in Afarak Holdings Ltd.

LNS proposes that the cash element of the offer should be done and dusted, if possible by the end of March 2019.

The board of directors of Afarak Group will discuss the received letter of request in the manner provided by the Finnish Companies Act, Afarak said.

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