Shares in Lincat (LON:LCT) surged this morning on news that the AIM listed foodservice group was set to recommend a 1,050 pence per share takeover offer from Middleby Corporation (NASDAQ: MIDD). The cash offer values Lincat at approximately £58 million and represents a 37.7% premium to the company’s closing price of 762.5 pence yesterday. The Lincat share price rose by 34.4% to 1,025 pence during the morning. The shares started 2011 at 632p and after a sharp incline have remained above 750p since mid-February.
The news came on the same day that Lincat reported a 6% rise in revenues from continuing operations to £32.7 million and 15% growth in underlying operating profits to £5.6 million. The company paid out £1.6 million in dividends during the year but as part of today’s deal announcement has cancelled plans for a final dividend.
Alan Schroeder, the chairman of Lincat, said: “The board of Lincat is confident that the offer from Middleby is in the best interests of Lincat’s shareholders and its employees. We believe the price being offered is at a significant premium and is one which reflects the underlying value and prospects of the Lincat Group. Lincat will provide Middleby with a significant platform in the UK whilst Middleby’s diverse geographic presence will provide Lincat with increased access to overseas markets.”
Selim Bassoul, the chairman and chief executive of Middleby, said: “Lincat is a leading brand in the UK foodservice industry and its broad line of products is highly complementary to Middleby’s existing portfolio. This acquisition will provide Middleby with a local manufacturing platform and significantly enhance our presence in the UK market. We believe this transaction will provide for meaningful growth opportunities for both Middleby and Lincat in the UK market as we leverage Lincat’s existing sales, service and manufacturing capabilities.”
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