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Healthcare recruiter Healthcare Locums (HLO:LSE) is to be acquired by Angel Acquisitions, a newly incorporated company formed for the purpose of making and implementing a cash offer to the company.
Angel Acquisitions is currently owned by ACE Holdco and by Tosca Opportunity. Under the terms of the offer, HCL shareholders will be entitled to receive 0.75 pence in cash for each share.
In a message to shareholders on Thursday, HCL said: “The Directors of HCL and the Board of Angel Acquisitions are pleased to announce that they have reached agreement on the terms of a recommended cash offer by Angel Acquisitions for the entire issued and to be issued share capital of HCL not already acquired or agreed to be acquired by Angel Acquisitions to be implemented by means of a takeover offer.”
HCL has come under financial pressure, earlier this year announcing that extra capital funding was needed to keep the business afloat. Angel Acquisitions wants the recruiter to undergo further operational and financial restructuring. This includes plans to de-list the company from the stock market.
“Angel Acquisitions believes that it is better for the company to cancel the admission to trading of the HCL Shares on AIM ("De-list") prior to undertaking any such restructuring,” HCL said.
This, the firm said, was in part due to “the ability of the company to engage more quickly and confidentially with its customers after de-listing, and Angel Acquisitions is only willing to provide further capital funding on this basis. Angel Acquisitions believes that a de-listing will also enable the company to reduce its administrative and regulatory overheads as well as freeing it from the need to commit significant management resources to complying with the continuing public disclosure requirements that arise as a result of being a listed company,” HCL added.
“Having concluded that the company requires additional capital, it became apparent to the Board of HCL that it would require the support of its majority shareholders to obtain further funding. Angel Acquisitions is prepared to provide certain funding support to the Company but this is conditional upon a number of matters occurring, including the De-listing and the restructuring completing.”
Without additional funding there will be little or no equity value left in the business, HCL board members believe. Therefore, “it is highly likely that the offer will be completed and that the company will be de-listed. Following the de-listing, the Board of HCL believes that shareholders would be likely to have limited opportunity to sell their shares and if the restructuring were to proceed as envisaged, minority shareholders would suffer significant economic dilution.”
HCL has also reached an agreement with senior lenders regarding key changes to the Senior Facilities Agreement. “This agreement is conditional upon Angel Acquisitions providing up to £10 million of new funding to the Company and Angel Acquisition's agreement to do so is, in turn, conditional upon the Offer becoming or being declared unconditional in all respects and HCL being De-listed. The Senior Lenders have given their consent to the change of control resulting from the Offer and to the De-listing of HCL.”
The company’s share price improved by nearly +4% in trading this morning as the stock price reached 0.726 pence, but still down -71% from a year ago. HCL has a current market value of £5.93 million.