Time Finance plc (LON: TIME), the AIM-listed asset and invoice finance lender to UK small businesses, has agreed to be bought for £55.13m in cash by Bentley Park (UK) Limited, the parent of rival lender Ultimate Finance. The board has unanimously recommended the deal, announced on Monday, under which Bentley Park will pay 59.1p for each Time Finance share.
The 59.1p offer values Time Finance at approximately £55.13m on a fully diluted basis. It represents a 12.6% premium to Friday’s undisturbed close of 52.5p, a 23.5% premium to the three-month volume-weighted average price of 47.84p, and a 27.5% premium to the six-month VWAP of 46.34p. Around 47.36% of Time Finance’s shares are already committed to the deal through irrevocable undertakings, including all company directors and largest shareholders Arena Investors L.P., GPIM Limited and Ron Russell.
The transaction is structured as a Court-sanctioned scheme of arrangement, with Bentley Park reserving the right to switch to a takeover offer instead. Cavendish advised the Time Finance board on financial terms.
Ed Rimmer, chief executive of Time Finance, said: “The Time Finance Board believes there is a strong strategic fit between the two businesses, the combination of which will create a broader platform, introduce the benefits of additional scale and provide additional resources that can support future growth, without losing the focus on customers and introducers that have made our business great in the first place.”
Combining Ultimate Finance’s roughly £430m loan book with Time Finance’s £218m book would create a lender with a near-£650m net loan book, giving the combined business greater scale to compete on funding, distribution and cross-selling to small and medium-sized enterprise customers.
Time Finance shares closed at 58.0p on Tuesday and changed hands at 57.13p in early trade today, leaving the stock close to the 59.1p cash offer and well above Friday’s undisturbed close of 52.5p, though still inside the 52-week range of 40.11p to 60.00p. Completion requires shareholder votes, Court sanction and Financial Conduct Authority approval of the change of control of Time Finance’s regulated lending entities, with the deal targeted to become effective in the fourth quarter of this year. That regulatory and voting process is now the main swing factor for the shares, which are trading within a penny of the offer price.