The PLC’s share price hit a new 52-week high of 125.49p on the back of the latest development.
Before Christmas De La Rue announced that it was in discussions with Disruptive Capital GP and Pension SuperFund Capital entities (the PSFC Entities) about a possible 125p-a-share deal for at least 30%, and up to 40% of the business.
By early January this had been replaced by a preliminary potential cash offer for the whole group.
Yesterday afternoon (4 February) De La Rue issued a further update, and said over the past month it had also received “preliminary approaches from separate third parties”, in addition to the proposals received from the PSFC Entities.
These approaches may or may not result in possible cash offers for group.
“In this context, the board has unanimously concluded that it would be appropriate to investigate the sale of the company and therefore has now decided to commence a ‘formal sale process’ for the company.”
De La Rue clarified that it was also making progress with the previously agreed deal to sell its £103m turnover Authentication division to Crane NXT for £300m, and remained in discussions about its remaining Currency division.
In light of the latest events, the Takeover Panel has agreed that the previous deadline of 6 February for the PSFC Entities to make a firm offer, or not, no longer applies.
The PSFC Entities proposal now involves a transaction structure whereby a debt instrument would be issued to PSFC and a share buyback agreed at 125p per share.
This would involve certain conditions, including an agreement with the De La Rue Pension Fund Trustees to “derisk” the group’s defined benefit pension scheme, and the completion of the Crane NXT deal.
De La Rue had previously stated that the proceeds of the sale to Crane would allow the PLC to repay its existing £235m revolving credit facility in full and reduce leverage to “a net cash position”.
De La Rue is required to repay the facility on or before 1 July, and had previously warned that it would have insufficient liquidity to repay it if it was unable to successfully conclude a sale.
It also planned to use some of the remaining proceeds to pay £30m into its legacy pension scheme, plus an additional £12.5m in deficit repair contributions over the period to April 2027.
De La Rue’s pension scheme had a £78m deficit at September 2023.
The group has deferred deficit repair contributions since April 2023 because of its financial issues.
De La Rue had sales of £310m in its most recent results and employed 1,600 at the March 2024 year end.
It prints banknotes for half of all central banks worldwide, and has a contract with the Bank of England to operate the Bank’s printing facility. De La Rue took over the operation of the BoE's Debden printworks in April 2015. That arrangement was originally set to expire this year, but in 2020 an agreement was reached to extend the deal until 2028.
The formal sale process is being managed by Deutsche Numis.
