NORTHERN BEAR PLC (Alliance News) - Northern Bear PLC on Monday said it plans to return GBP3.1 million through a tender offer of up to 27% of it shares, with its chair set to sell his shares as he plans to retire after a general meeting in mid-November.
The Newcastle, England-based building services firm also reiterated previous positive guidance on its current trading.
Northern Bear said it plans to tender up to 5.0 million shares at a fixed price of 62 pence per share, which is a 39% premium to the closing price of 44.5p on the "last practicable date", or a 26% premium to the volume weighted average price per share over one month.
On Monday morning, Northern Bear shares were up 22% to 54.50p each in London.
Northern Bear said the offer was conceived as part of a strategic review and that it is expected to be accretive to earnings per share from completion of the tender offer and for its financial year beginning April 1.
Northern Bear also said the tender offer would enhance the company's capital structure and would create an exit strategy for all shareholders who wish to sell their investments.
Non-Executive Chair Jeff Baryshinik will sell all his 4.7 million shares, either owned directly by himself or via his company Cedarvale Holdings Ltd, in the tender officer.
This is because he plans to retire after the general meeting on November 15, in which shareholders will vote on the tender offer resolution.
Harry Samuel, a non-executive director, will take the position of interim non-executive chair until the Northern Bear board has appointed a permanent successor.
Other board members have signed irrevocable undertakings to vote in favour of the tender offer resolution, as Baryshinik has, but to not participate in the tender offer, as they believe there is greater long term value in the company than represented by the tender price, and so would rather retain their holdings.
Northern Bear said the board unanimously recommends shareholders to vote in favour of the resolution, although it makes no recommendation on whether to tender shares or not.
"Such a decision is reserved solely for individual qualifying shareholders," the company said.
Northern Bear also reiterated positive guidance on its current trading, saying it was strong in the period from April 1 to August 31 compared to the equivalent period a year earlier.
It said it plans to provide a further update on its six month trading to September 30 in the week beginning Monday next week, in order to allow shareholders to make decisions based on the expected half-year results.
Northern Bear expects to release its half-year results in late November.
By Greg Rosenvinge, Alliance News reporter
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