By Andy Silvester
A consortium led by Sir Peter Wood, the founder of Direct Line, and City fund management bigwig Gary Channon appears set to take the reins of Dignity, the London-listed funeral firm.
In an announcement to markets this evening, Dignity said it would be “minded to recommend” a fourth offer by Wood and Channon’s consortium to shareholders – with existing investors offered the chance to continue investing via either a private Bidco or through the London-listed investment firm Castelnau, run by Channon, or cash out.
Channon – whose fund Castelnau is backed by Phoenix Asset Management – is also the former CEO of Dignity.
The offer represents a 23.4 per cent premium on Tuesday’s closing price and is more than 10 per cent above the first proposal.
Midlands-headquartered Dignity is the only publicly-listed funeral provider in the UK – but that may soon change if the take-private deal goes through.
Sir Peter Wood said: “Dignity has long-term growth potential – the signs are clear to me. But the changes and significant development work and investment needed to enable this growth mean the best way forward for Dignity is as a private company”.
Dignity worked with Rothschild in evaluating the deal, a significant bump on the original offer price, and will now open the books for limited due diligence.
The Wood/Channon bidco, Valderrama, said the brand had “growth prospects that can only be realised over a long-time horizon and that require significant additional near-term capital, and dealing with that in the public markets will be difficult and potentially damaging to the delivery of the core strategy.”
There can be no certainty that an offer will be made.
It is the latest in a series of bids to take London-listed entities private, with many believing the capital’s publicly listed firms remain undervalued.
The post Takeover bid: Why listed funeral firm Dignity appears set for new private ownership appeared first on CityAM.
