Medico-legal reports supplier LitComp has agreed a 35p a share cash bid from Torridon Capital.
This values LitComp at £5.48m. Loan note holders will receive 116.7p a share for each £1 loan note. They can convert the loan notes into shares at 30p each but would lose interest between conversion and the date of the purchase of the shares.
At 29p a share, the current share capital is valued at £1.85m.
Once the bid goes through Torridon, formerly Aberdeen Asset Management, will be owned by Maven and Nigel Wray. Management are being offered the chance to roll over their shareholding. The management team will stay in place. They will receive additional cash from a disposal or flotation if Maven and Wray receive three times their investment in Torridon with an internal rate of return on investment of at least 30%.
LitComp is short of cash. It would need to repay its loan notes and find additional working capital for its Elite business, supplies after the event insurance for legal expenses and indemnifies litigants in the event that their case fails. Elite needs the cash to increase its underwriting capacity.
Maven and Wray would have asked for their loan notes to be paid in cash if LitComp had not agreed to the bid.
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