TOP shareholders in AssetCo, the largest fire-engine supplier to the London Fire Brigade, have criticised its board for not considering a takeover approach more carefully.
The Aim-listed company yesterday said it had rebuffed months of bid talks and taken out an emergency loan of £1.45m as it prepares to raise more cash from its shareholders.
One of the firm’s top investors, however, told City A.M. that certain institutions would have been in support of a takeover bid.
“The company has a duty of care to its shareholders to consider a bid at a significant premium carefully and we can’t understand why it didn’t do it,” said the shareholder. The announcement comes one month after problems with its short-term funding broke-up talks with a third party.
AssetCo is understood to have received a formal bid from a Middle Eastern investor after it turned to shareholders last month for emergency funding. But the company rejected the approach, calling it “opportunistic”.
“Independent directors consider the current approach to be opportunistic and not in the interest of shareholders as the indicated price range included an offer at a discount to the current market price,” it said in a statement.
Next Monday AssetCo will ask shareholders to approve the proposed placing of new shares to raise £16m, which will help repay the short-term loan facility from its principle banker.
AssetCo’s loan announcement reassured investors and sent shares up 24 per cent, closing at 19.75p.