Mitie Group plc (MTO.L), a facilities management and professional services company, announced Thursday that it has reached agreement on the terms of a recommended cash and share offer to buy Marlowe Plc (MRL.L) for around 366 million pounds.
Following the deal, Mitie said it is suspending the 125 million pounds share buyback programme, launched on April 16, with immediate effect.
Under the deal terms, each Marlowe Shareholder will be entitled to receive 1.1 New Mitie Shares and 290 pence in cash. The acquisition represents a total implied value of 466 pence per Marlowe Share based on Mitie's closing share price of 160 pence as of June 4.
It is proposed that the acquisition will be effected by means of a scheme of arrangement of Marlowe.
The per share price represents a premium of around 26.5 percent to the closing price per Marlowe Share of 368 pence on June 3, being the day prior to the market speculation of an approach.
Marlowe Shareholders will, in aggregate, receive around 86.57 million New Mitie Shares. Immediately following the deal closure, Marlowe Shareholders will own approximately 6.4 percent of Mitie.
Regarding the share buyback, Mitie said it has purchased a total of 2 million ordinary shares of 2.5 pence each at an average price of 140p under the Share Buyback Programme to date.
Consistent with the firm's commitment to purchasing all shares to fulfil employee incentive schemes, it intends to buy a further 4 million ordinary shares, as an exception to the suspension, to satisfy the balance of outstanding awards under the 2022 SAYE scheme.
Following the Marlowe acquisition, Mitie said it expects leverage to quickly reduce through cash generation and increasing profitability. This will enable the resumption of surplus funds being returned to shareholders through share buyback programmes.
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