UPDATE: Spice Says Cinven's Possible Offer Undervalues Firm

15th Jun 2010 09:33

(Adds response from Spice, share price and detail.) By Rachael Gormley Of DOW JONES NEWSWIRES LONDON (Dow Jones)--Utility support services group Spice PLC (SPI.LN) Tuesday said the indicative possible offer price of 56 pence a share from European buyout firm Cinven Group Ltd is opportunistic and "significantly undervalues" the company, adding that it isn't in offer talks with Cinven or any other party. Spice has undergone a raft of changes internally recently, with major shareholder and entrepreneur Simon Rigby stepping down from the chief executive role in February to be replaced permanently in May by Martin Towers. The company has also sold off its telecommunications business and loss-making gas unit in the past few months as it looks to focus on utilities and cut its debt. "The board is confident that Spice can deliver significant value to shareholders over the medium term," the company said. Cinven said separately Tuesday its indicative possible offer price of 56 pence a share was rejected by the board of Spice but said it is still considering making an offer. The company declined to comment on whether it would be making an offer of more than 56 pence a share and said there is no guarantee that a firm offer will be made. In a statement in response to Monday's movement in Spice's share price Cinven said it approached the company May 24 with the 56 pence cash approach, subject to due diligence and the board's recommendation. The possible offer was a 51% premium to the share price at the close of business May 21. Cinven added that it isn't currently in talks with Spice about an offer. Spice added Tuesday that is it trading in line with the board's expectations and expects to announce its results for the year to the end of April on July 6. At 0816 GMT, shares in Spice were up 3 pence, or 6%, at 52.75 pence. The wider FTSE All-Share index was down 0.3%. -By Rachael Gormley, Dow Jones Newswires; 44-20-7842-9308; [email protected] (END) Dow Jones Newswires June 15, 2010 04:33 ET (08:33 GMT)