DBay enters battle to take CareTech private

4th Apr 2022 08:43

(Sharecast News) - DBay Advisors entered the fray in the battle to take CareTech private on Monday, announcing a higher possible offer than the Sheikh brothers' upgraded proposal.

The AIM-traded CareTech said on Friday that the Sheikh Holdings consortium, formed by the company's founders, was proposing a possible offer at 725p per share.

Its board said it "would be minded to recommend" that offer, should it formally be made.

On Monday, DBay announced that it also submitted an indicative proposal to CareTech regarding a possible all-cash offer at 750p per share.

The Isle of Man-based asset manager said its possible offer represented a premium of 28% to the CareTech closing share price on 4 March, being the last business day before the announcement of a possible offer for CareTech by Sheikh Holdings.

It said its proposal also included a partial non-voting share alternative to allow shareholders to roll-over some of their investment, and retain an interest in CareTech's future, should they choose to do so.

The alternative offer would be limited to 30% of the issued capital.

"DBay looks forward to engaging constructively with CareTech and its management team and working towards the announcement of a recommended transaction," the board said in its statement.

The asset manager also confirmed that funds it managed or advised had acquired 2,028,084 CareTech shares in total, equivalent to 1.8% of its issued share capital.

It said the highest price it paid was 710p per share, with the shares acquired in the open market.

Under the Takeover Code, any firm offer for CareTech would need to be at or above that price.

CareTech itself responded to the new possible offer on Monday, confirming it was in talks with DBay on the proposal.

"Discussions with DBay Advisors and their advisers are at an early stage and accordingly there can be no certainty that an offer will be made," CareTech said.

"The independent directors advise shareholders to take no action as a result of this announcement.

"Further announcements will be made as appropriate in due course."

At 0825 BST, shares in CareTech Holdings were up 3.66% at 737p.