Carpetright has accepted a takeover offer from its financier Meditor and called on investors to back the bid as it seeks cash to repay debt and provide working capital.
In a statement to the London Stock Exchange this morning, Carpetright confirmed it had received and accepted a cash offer from Meditor “to acquire the entire issued and to be issued share capital” of the retailer.
Carpetright has called on all shareholders to back the 5p per share offer for the business by Meditor at a value of £15.2m, as it looks to refinance itself to repay debt and provide working capital.
Meditor owns around 29% of Carpetright and has been financing its revolving credit facility and overdraft facilities, both of which are due to expire at the end of the year.
The retailer previously said at the end of October that it would need as much as £80m to cover debt obligations and push ahead with its turnaround strategy.
If accepted, the offer would see Meditor increase its stake in Carpetright by a further 30.3%.
Carpetright chair Bob Ivell called on investors to back the takeover.
He said: “We believe the [Meditor] offer is in the best interests of all stakeholders. While we have made significant progress with our recovery plan for the Carpetright Group, our ability to invest in the future of the business has been constrained against the backdrop of limiting banking covenants and a very challenging consumer market.
“With a recapitalised business and the backing of a committed new owner with the resources to invest in Carpetright for the long term, we will be able to complete our recovery in the private arena and emerge as a stronger business.”
Carpetright had previously looked at various long-term financing options, including standard refinancing, asset-backed lending, strategic asset sales and equity financing before beginning talks with Meditor.
Shareholders will be given a chance to vote on the takeover at a general meeting within the next 28 days.
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