Scapa agrees sale for £403m as Covid-19 risks persist
Scapa Group has agreed to be bought for £403m in cash by Schweitzer-Mauduit International (SWM) of the US, arguing the offer is good value in a market made risky by Covid-19.
SWM said it would pay 210p for each Scapa share - 18.6% more than Scapa's closing price on 26 January and 58.5% more than the average price over the past six months.
Scapa shares rose 25% to 222p at 11:52 GMT suggesting some investors were betting on a higher offer emerging for the the tapes and adhesives manufacturer. The shares had lost about a third of their value before the deal was announced.
The US company said Scapa was a well-regarded healthcare and industrial group with major clients. It said the buying Scapa would enhance its scale in advanced materials and healthcare.
Scapa said it had stood up well to the Covid-19 crisis but that it faces near-term risks including fewer elective procedures using its products, uncertainty in automotive and construction markets and delays in improving use of its factories after losing a contract with ConvaTec in 2019.
The AIM-traded group said: "SWM's offer represents compelling value given the balance of future opportunities and risks facing the business, limited capital market liquidity resulting in share price volatility and provides an opportunity for Scapa Shareholders to crystallise, in cash, the value of their holdings."
SWM has said there will be no major reduction in headcount or the company's locations but that there were likely to be cuts in "certain corporate and support functions". Scapa's head office is in Ashton-Under-Lyne, Greater Manchester.