Amigo announces potential takeover bid but says Richmond not engaging
Amigo Holdings announced on Wednesday a potential takeover offer of 20.9p a share but said it has been unable to "engage constructively" with controlling shareholder Richmond Group about the offer.
Amigo did not name the potential buyer but said it had completed its due diligence and was prepared to announce a firm intention to make an offer.
The subprime lender said that despite attempts to discuss it with Richmond Group, it has been unable to ascertain the shareholder’s "willingness or not" to accept the offer. Richmond has a 61% stake in Amigo.
"Richmond Group has requested that Amigo publicly disclose the status of the formal sale process such that it can be cleansed of inside information relating to the FSP," it said. Amigo said there can be no certainty that any offer will be forthcoming.
The company put itself up for sale in January, having floated in June 2018, after Richmond said it would willingly sell off its interest.
Amigo also said in the statement that as a result of its special Covid-19 forbearance program announced on 24 March, it has provided forbearance to around 42,000 customers.
"The trend of requests has slowed through May and we are confident that we have sufficient resources in place to work with our customers and help with their recovery when the forbearance period ends," it said.
Amigo said liquidity remains "strong" and it has sufficient financial headroom and cash on its balance sheet to continue to fund operations and support its customers "during this challenging time". The company recorded a cash balance of more than £115m as at 25 May.
It said cash collection has remained strong since 1 April despite the Covid-19 forbearance program.
"Amigo continues to monitor the macro environment and Government and regulatory announcements and will consider its approach to carefully reducing the special Covid-19 forbearance program in the coming months."
At 1340 BST, the shares were down 9.4% at 20.30p.