Consortium in talks with Dignity over £262m takeover
A consortium backed by former direct line founder Sir Peter Wood is in talks with Dignity over a potential takeover of the funeral provider that could value the firm at £262m.
A subsidiary of Valderrama – a joint venture between Wood’s investment firm SPWOne and investment house Castelnau Group, the consortium has made a proposal of 525 pence in cash per Dignity share, which is a 23.4% premium to Dignity’s closing price of 425.5p as of 3 January 2023.
The Consortium had first approached Dignity on 13 October 2022 in relation to a cash offer of 475 pence per Dignity share, which was a 37.1% premium to the closing share price of 346.5 pence per Dignity share on 12 October 2022. The new Proposal is an increase of more than 10% compared with the First Proposal.
The Proposal also includes the option for Dignity shareholders to stay invested in Dignity through an unlisted share alternative in Valderrama or a listed share alternative in Castelnau.
The Consortium said it believes that Dignity has growth prospects that “can only be realised over a long-time horizon and that require significant additional near-term capital; and dealing with that in the public markets will be difficult and potentially damaging to the delivery of the core strategy and the brand reputation”.
The Consortium also revealed it strongly believes that Dignity would be better “developing the business in the private domain, including undertaking the strategic and commercial changes necessary”.
Wood said: “Dignity has long-term growth potential – the signs are clear to me. But the changes and significant development work and investment needed to enable this growth mean the best way forward for Dignity is as a private company.”
Gary Channon, CIO of PAMP and former CEO of Dignity, added: “We strongly believe that the changes needed to unlock the potential of Dignity are better implemented as a private company. Shareholders who want to stay invested could do so through the private holding company Valderrama, or via the London-listed investment fund Castelnau. Shareholders who want immediate liquidity can take cash for their shares at a 23.4% premium.”
