A Canadian-owned investment firm has announced it has successfully bought nearly 5.5m shares in a Newcastle building company.
Last month directors at building firm Northern Bear were surprised to learn that a company known as Cedarvale Holdings had announced to the Stock Exchange that it wished to by 5.4m of its shares.
Cedarvale, which is owned by Canadian investor Jeff Baryshnik, said it wished to pick up a 29.6% stake in Northern Bear from the company’s existing shareholders. The business offered 72p per share, which was a 20% mark-up on their value at the time of the offer.
In total the offer was valued at £3.9m.
Cedarvale has now informed the London Stock Exchange that it has received enough sale offers from shareholders that its deal will now go ahead.
In a statement the company said: “Cedarvale Holdings Ltd (“Cedarvale”) is pleased to confirm that the Minimum Tender Condition has been satisfied with respect to its tender offer to purchase up to 5,400,000 shares in the capital of Northern Bear plc at 72 pence per share, which represents a 20.0% premium above the closing bid price immediately preceding Cedarvale’s initial Announcement. Accordingly, the Tender Offer is declared unconditional with respect to acceptances.”
Cedarvale has also provided information to Northern Bear’s current shareholders about how they can finalise the sale of their shares, and transfer them to the investment firm.
Following the deal Northern Bear will be 29.6% owned by Cedarvale. If the investment firm was to increase its stake past 30% it would be legally required to put forward an offer to buy the rest of the company’s stocks and attempt a takeover.
The company’s decision to not breach the 30% mark suggests it does not want to fully own the company, although it could choose to make a takeover offer later.
By owning more than 25% of the shares, Cedarvale will not have a majority but will be able to veto any special resolutions proposed by the board.
Northern Bear’s directors had already said that they would not be selling their stake in the company to Cedarvale. In total the directors own 15.9% of Northern Bear’s shares.
