The board of AFH and Flexpoint Ford have agreed an increased deal which would see the private equity firm pay 480p in cash for each AFH share. Under the previously agreed deal, shareholders would have been entitled to 463p per share.
US private equity firm Flexpoint Ford LLC agreed a £224.5m cash takeover of Financial Planning group AFH in January. Under the new deal the cash takeover values AFH at around £231.6m.
The independent directors of AFH also said today that they unanimously support the deal and urge shareholders to vote in its favour.
The new deal announcement comes the day after AFH Financial temporarily suspended trading in its ordinary shares on the AIM index pending an announcement from the business. Share trading in AFH has now resumed following the announcement of the new deal.
The takeover target has also delayed a general meeting due yesterday to ratify its sale to a private equity firm until further notice. The firm said the meeting will be reconvened “in due course” in connection with the increased offer.
The moves follow opposition to the original conditions for sale from its largest shareholder, Slater Investments, which owns approximately 13% of the business. Flexpoint Ford has now received an “irrevocable undertaking” from the shareholder to vote in favour of the updated scheme.
The private equity firm has also received confirmation from GLG Partners, GWM Asset Management, Lombard Odier Asset Management, Otus Capital Management, Sand Grove Capital Management, and Tavira Securities that they will vote in favour of the new scheme. Between them they hold roughly 14.2% of AFH’s issued share capital.
AFH’s executive directors, Alan Hudson, independent directors, Paul Connor, Philip Mobberley and BMO Asset Management have also agreed to vote in favour. They hold roughly 33% of AFH’s issued share capital.
The deal to sell AFH requires a 75% majority of shareholders but it is not yet known what percentage back the takeover deal.
West Midlands-based AFH, one of the UK's largest Financial Planning firms, has grown rapidly through acquisition of Financial Planning and IFA firms in recent years but last year slowed down its acquisition programme to focus on bedding in new acquisitions.
AFH has acquired 50 Financial Planning and IFA firms in the past six years.
Flexpoint, which has offices in Chicago, New York, has set up a UK takeover company, Cortina Bidco, to see through the deal.