Connect with us

Hi, what are you looking for?

World News

Funeral director Dignity gives thumbs up to £281m takeover

Offer: Dignity has accepted a 550 pence per share approach from a consortium including investment firms, SPWOne, Castelnau Group and Phoenix Asset Management Partners

Dignity approves £281m takeover by a consortium of investors led by former funeral group boss Gary Channon

  • Three previous takeover proposals were rejected by Dignity’s board last year
  • The new offer represents a premium of 29.2% over the closing price on January 3
  • Leading the acquisition is SPWOne boss and serial entrepreneur Sir Peter Wood

Funeral service provider Dignity has agreed to a takeover worth around £281million by a syndicate led by one of its former chief executives.

It has agreed to a 550p per share approach for around 29% of its capital by a consortium including investment firms SPWOne, Castelnau Group and Phoenix Asset Management Partners.

Three previous deals valued at 475p, 500p and 510p per share, respectively, were rejected last year by the Birmingham-based company before receiving an offer of 525p per share which its board was ‘would recommend to shareholders “.

Offer: Dignity has accepted a 550 pence per share approach from a consortium including investment firms, SPWOne, Castelnau Group and Phoenix Asset Management Partners

Offer: Dignity has accepted a 550 pence per share approach from a consortium including investment firms, SPWOne, Castelnau Group and Phoenix Asset Management Partners

Following further negotiations, Dignity has decided to approve a new proposal which represents a premium of 29.2% over its closing share price on January 3, the last business day before the start of the offer period.

Leading the acquisition is SPWOne boss and serial entrepreneur Sir Peter Wood, who founded insurers Direct Line and Esure Group and was an early investor in price comparison site Gocompare.com .

He partnered with Peter Channon, chief investment officer of Phoenix, who became chief executive of Dignity in April 2021 after a coup that toppled Chairman Clive Whiley.

Although he was only in charge for 14 months, his tenure saw the business return to profit and launch a new strategy, which included a target of securing a fifth of the UK funeral market share from a decade here.

The consortium says the takeover would strengthen Dignity’s long-term strategy by improving investment in its infrastructure, technology, people and marketing of its funeral plan products.

He also claims the new management would be better able to navigate changing regulations affecting the funeral care industry, which were introduced two years ago following an investigation by the Competition & Markets Authority.

Among the new rules introduced by the CMA were a requirement for funeral directors to publish standardized price lists and a ban on payments to induce hospitals or hospices to refer consumers to particular operators.

“Dignity has long-term growth potential — the signs are clear to me,” Wood said. “However, given the challenges and significant development work required, the best path forward for Dignity is as a private company, benefiting from our unique combination of customer-focused experience and expertise.

“We are offering a very fair cash prize, or shareholders can stay on the journey with us as we seek to execute our strategy to create meaningful medium-term value.”

Dignity also told investors on Monday that it expects to report making up to £275m of underlying revenue for 2022, down from at least £37m on the previous year. last year.

Even though death rates have increased since the start of the Covid-19 pandemic, the group said sales have been heavily impacted by a new pricing strategy and a sustained move away from more expensive products.

Alongside this, the company expects underlying operating profit to have fallen by more than half to a high of £20 million due to rising regulatory and operational costs and investments related to its business and to its facilities.

Dignity shares topped the FTSE All-Share Index late Monday afternoon.

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

You May Also Like

Business

When you apply for a personal loan, lenders first determine your credit score to know how credible and reliable you are. This means that...

Health

It’s fun to be a student, especially if you’re motivated to achieve. However, it’s getting harder for students to focus in today’s busy society....

Finance

Loans against property are a common option for people needing high-value cash. Given that its interest rates are almost 3% to 4% more than...

Business

Zion Market Research has released a new report that projects the Endotracheal Tube Securement Devices Market: Global Industry Perspective, Comprehensive Analysis and Forecast, 2018-2025. The year...