HE MAY be an “old, saggy cloth cat, baggy, and a bit loose at the seams,” but Bagpuss’ owner has agreed to sell him for £4.2m.
The announcement that media rights owner Coolabi has agreed to a 7.75p a share deal with North Promotions sent its stock tumbling by almost a quarter yesterday, as the offer failed to live up to pre-bid hype.
But sources close to one major investor told City A.M. the offer is likely to receive the backing of shareholders.
A round of fundraising in June valued the stock at 6.75p and shares were trading hands for between 6-7p before speculation of a sale surfaced last month.
However Coolabi, which also owns the intellectual property rights to Purple Ronnie, previously surged to as much as 10.62p as investors salivated over the prospect of a juicy premium.
An independent director at the company said Coolabi consulted shareholders about the potential benefits of a further round of fundraising or a period of organic growth and concluded the offer represents the best option.
North Promotions, an investment vehicle owned by Edge Performance VCT, says it “attaches great importance to the skills and experience” of the existing management, who are expected to maintain their five per cent holding in the firm if the transaction closes.
North Promotions will hope to cash in on the lucrative marketing rights to 37-year-old Bagpuss and his friends.
MEET THE ADVISERS: EVOLUTION SECURITIES
CORPORATE FINANCE DIRECTOR
Jeremy Ellis is heading up the Evolution Securities team advising Coolabi.
The corporate finance director joined Evolution in 1997, working across the spectrum of corporate finance and broking activities. He has advised on clients on initial public offerings, secondary fund raisings and general M&A, including public takeovers.
Recent transactions include the merger of Wichford and Redefine International and the admission of Aureus Mining to AIM. Other high-profile media clients include Eros International. He has also handled transactions on the Official List and Nasdaq Europe, and has advised both UK and overseas companies.
Also on the Evo team is Chris Clarke, who joined Evolution Securities in 2005.
The associate director in corporate finance worked alongside Ellis on the Wichford/Redefine merger and also advises Eros International.