One51 offers to buy Straight plc for £10.7 million
The board of Yorkshire-based container manufacturer Straight plc (Straight), has reached agreement on the terms of a £10.7-million acquisition offer made by One51 plc (One51).
Takeover talks between Straight and the Irish-based owner of a rival wheeled bin manufacturer, MGB Plastics, have been ongoing for some time. On 14 February 2014, Straight announced that One51 had approached the company with an interest in acquiring the business.
The board agreed to enter negotiations and One51 had until 5pm on 14 March to either announce a ‘firm intention’ to make an offer for Straight, or that it did not intend to buy it. But, after the Straight board requested an extension to this deadline, this was moved to 11 April.
It has now been revealed that last week (2 May), One51 confirmed the bid for the firm, which is listed on the Alternative Investment Market (AIM) (a sub-market of the London Stock Exchange), with the Straight board agreeing to sell shares at 78 pence each.
The offer represents a 66 per cent premium on the share price before takeover talks were announced in February, and amounts to a total of £10.7 million.
Shareholders will now be consulted on the deal, but the board is ‘unanimously recommending’ that shareholders vote to approve and implement the offer.
Jonathan Straight to step down if deal approved
If the deal is approved, Jonathan Straight, currently Straight’s Chief Executive Officer, will step down as director and employee of Straight, but will be retained on an 18-month contract as consultant.
The non-Executive Directors of Straight have also agreed to resign from the board if the offer becomes effective. All positions will be renumerated for their resignation.
Any Executive Directors, other than Jonathan Straight, will continue to serve as usual.
Reasons for the acquisition
One51 has said that it wished to acquire Straight to ‘build on the success’ of MGB Plastics by making ‘complementary strategic acquisitions in the UK’. It specifically added that the combination of MGB and Straight would create a ‘leading specialist injection moulding group’ in the UK.
Alan Walsh, Chief Executive of One51, said: “We aim to support Straight in its growth plans by providing the security of a strong balance sheet and continuing to innovate the business model through investment in technology and machinery.
“The combination of One51 and Straight is an exciting opportunity as it adds considerable breadth, depth and scale to One51’s existing offering, creating a leading specialist injection moulding group in the UK which can then grow into other European markets.”
Straight’s board said that the business will ‘benefit substantially from being part of a larger group that will leverage its existing customer network as well as its product development and branding expertise’.
James Newman, Chairman of Straight, said the takeover “will bring immediate and long-term benefits to our clients and staff”.
Read more about the takeover offer.