The two bidders battling for control of the trade finance group London Forfaiting Company were yesterday slugging it out to gain shareholder support for their respective offers.
First International Merchant Bank, the Maltese finance bank that has had its £31m cash offer already recommended by the LFC's board, said it had extended a share offer for another week. It has pledged 29.5p a share for LFC and also yesterday announced that 64.7 per cent of shareholders supported its bid, despite the recent emergence of a counter bid by the turnaround financier Jonathan Rowland.
Mr Rowland's investment company, Resurge, last week made an all-share offer for LFC that is worth £39m to shareholders. Under its reverse takeover deal, 3.43 Resurge shares will be offered for every LFC share. This values each LFC share at 36.87p. Shares in the company closed unchanged at 30.25p yesterday, making the company worth £31.7m.
A spokesman for FIMBank said yesterday: "LFC shareholders have not wavered despite the appearance of Resurge, which is a vote of confidence in our cash offer."
But Mr Rowland hit back at accusations made by the FIMBank camp last week that Resurge's offer "lacked credibility". "Ours is an all-share offer [made] deliberately, so as to provide LFC shareholders with the opportunity to benefit in full from the growth potential of the LFC business," said.
Mr Rowland said he was confident that shareholders will turn their back on the FIMBank offer. "The offer by FIMBank is an attempt to acquire LFC on the cheap. By accepting the offer, some investors may crystallise a significant loss on their investment." Shares in LFC were trading as high as 475p five years ago.
Mr Rowland believes the company, which provides loans and financing to international trade, offers growth opportunities. Its share price collapsed in 1998 after a crisis in the emerging markets. To finance the deal, Resurge will launch a share placing of up to £20m. Rowland Capital, Mr Rowland's family trust, has committed to £5m of the placing.
Resurge, however, has yet to put out an offer document to shareholders and LFC's board has yet to make a recommendation on its offer. The board put LFC up for sale in September, and until last month FIMBank was the only interested party.
FIMBank needs to gain 90 per cent of shareholder support for its offer to be declared unconditional by the LFC board. If this has not happened by 2 September, shareholders have the right to revoke their acceptance of the FIMBank offer. The directors of LFC own 13.3 per cent of the company and are thought to be keen to take the cash as a means of exiting the business.
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