Bin manufacturer Straight plc is set to be taken over by Irish group One51 following a board recommendation to shareholders to accept the company’s share offer.
Straight directors, who account for nearly 40% of the share capital, are backing the offer of 78p per share – it was at 47p when a preliminary approach from One51 was announced to the London Stock Exchange on 14 February 2014.
A decision on the offer, which values Straight at £10.7m, has been postponed three times since.
The Straight board said it considered the terms of the offer “to be fair and reasonable” and unanimously recommended Straight shareholders to back relevant resolutions at future meetings.
Alan Walsh, chief executive of One51 Group, said: “The board of One51 Group looks forward to the integration of Straight within its existing plastics division. We aim to support Straight in its growth plans by providing the security of a strong balance sheet and continuing to innovate the business model through investment in technology and machinery.
“The combination of One51 and Straight is an exciting opportunity as it adds considerable breadth, depth and scale to One51’s existing offering, creating a leading specialist injection moulding group in the UK which can then grow into other European markets.”
Straight chairman James Newman said: “We consider the offer represents an attractive premium on the average share price of Straight in the period prior to the announcement of a potential offer.”
Straight posted pretax losses of over £130,000 in its 2013 results released on 17 April, but said underlying profits before interest, taxes, depreciation and amortization increased more than 150% year-on-year.
One51’s Speciality Plastics division has a portfolio of injection moulding businesses in Ireland and UK, with a smaller manufacturing facility in China. There are five companies including MGB Plastics in Rotherham, manufacturer of wheeled bins and kitchen caddies and other recycling containers.
ClearCircle Environmental is the collective name for companies in One51’s Environmental Services division