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SPI Lasers

  • BY: Andrew Hore |
  • POSTED: 09/09/2008 |

SPI Lasers has agreed a 40p a share bid from a larger German rival.

The cash offer by TRUMPF International Beteiligungs-GmbH values SPI at £27.8m. SPI’s management believes that the business will be in a better position to prosper as part of a much bigger group. TRUMPF has annual turnover of €1.94bn.

Shareholders owning 56.4% of SPI have accepted the bid and Morley, which owns 10.1%, has written a non-binding letter of intent to accept.

The shares rose 8.5p to 38.5p on the news.

More recent buyers of the shares may be happy with this bid price but longer-term shareholders won’t be.

A placing at 30p a share raised £8.5m net in October 2007 and Furukawa Electric Co invested a further £2m at the same price. Furukawa is a Japanese quoted electronics company and it believed the link up with SPI would help its own fibre laser interests. It took a 10.65% stake and has already said it will accept the bid.

However, SPI raised £12m gross (£10.6m net) at 144p a share when it joined Aim on 26 October 2005. It then raised £5m at 185p a share in July 2006, followed by £10.1m net at 200p a share in February 2007.

SPI had net cash of £8.7m at the end of 2007 and earlier this year it believed that this was going to be enough to enable it to reach break even. It was even talking about moving into profit by the end of 2008 – although even then it will make a loss for the year as a whole.

Management is now talking about challenging market conditions and competition from larger companies. Interim figures will be released on 11 September and they will show how much cash was left at the end of June. It is difficult to raise cash under current market conditions so it may have been difficult for SPI to go it alone.

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