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Spice rejects £200m offer

Marion Dakers
UTILITIES support firm Spice rejected a takeover bid by private equity group Cinven in May, the company said yesterday.

Cinven announced the spurned bid after shares in Spice jumped seven per cent during trading yesterday.

The offer of 56p per share took place on 24 May, a week before Spice disposed of its loss-making gas business. The Yorkshire–based firm said the approach was “opportunistic”.

A deal at the offer price would have priced Spice at almost £200m, but the firm said it “significantly undervalued the company”.

Spice said in a statement: “The board has not entered into discussions with Cinven, or any other party, in relation to a potential offer. Spice is trading in line with the board’s expec­tations and our priority remains enhancing shareholder value.” Spice provides support to energy firms and was formed in 1996 as an offshoot from Yorkshire Electricity.

It recently appointed Martin Towers as chief executive and disposed of its telecoms business in an effort to reduce borrowings.

Buyout group Cinven owns over 100 industrial firms with a particular interest in energy companies. Its website says it targets firms that display “defensive market leadership with high barriers to entry”.

Its takeovers total €60bn (£50bn), and its assets include packaging firm Smurfit Kappa, parking company NCP and media group News­quest.

Geoff Allum at Arden Partners said in a note “it would take at least 75p in our view to get serious talks underway”. He added that Spice has made large strides in recent weeks.

Shares in Spice closed 2.5 per cent up at 51p.