Carpetright board agrees Meditor cash acquisition
By Josh White
Date: Friday 15 Nov 2019
(Sharecast News) - Carpetright announced on Friday that both its board, and that of Meditor Holdings (MHL), have agreed the terms of a recommended cash offer to be made by MHL to acquire the entire issued and to-be-issued share capital of Carpetright not already owned by Meditor Fund.
The London-listed flooring retailer said MHL is a newly incorporated wholly-owned subsidiary of Meditor Fund, established specifically for the purpose of the acquisition.
Meditor Fund is the beneficial owner of 29.9% of the issued shares of Carpetright, and as had been previously disclosed, on 3 September Meditor Fund purchased the lenders' interests in Carpetright's revolving credit facility.
That facility was due to expire on 31 December, with Carpetright's overdraft facilities also due to expire on the last day of the year.
Additionally, the unsecured loan provided to Carpetright by Meditor Fund on 11 May 2018 was due for repayment on 31 July 2020, at a value of £25.7m.
Under the terms of the scheme, holders of scheme shares would be entitled to receive 5p in cash per share, valuing the entire issued and to-be-issued share capital of Carpetright at £15.19m on a fully diluted basis.
The scheme had been unanimously recommended by the directors, Carpetright said.
It said that irrevocable undertakings and a letter of intent to vote in favour of the scheme had been received in respect of 30.3% of the issued share capital of Carpetright, and 43.2% of the issued share capital not currently held by Meditor Fund.
"We believe the MHL offer is in the best interests of all stakeholders," said Carpetright chairman Bob Ivell.
"While we have made significant progress with our recovery plan for the Carpetright Group, our ability to invest in the future of the business has been constrained against the backdrop of limiting banking covenants and a very challenging consumer market.
"With a recapitalised business and the backing of a committed new owner with the resources to invest in Carpetright for the long term, we will be able to complete our recovery in the private arena and emerge as a stronger business."
Talal Shakerchi, director of MHL, said he believed the Scheme represented the "best outcome" for all stakeholder groups.
"In particular, with Meditor's support and financial backing and without the constraints of a public market listing, Carpetright will be well positioned to compete more effectively.
"This will facilitate substantially increased investment in Carpetright's committed employees and its store estate as well as driving new initiatives and improvements.
"I am excited about the long term prospects and opportunities for the Carpetright business."
At 1552 GMT, shares in Carpetright were up 15.67% at 4.91p.
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