**Summary**
Irwell Financial Services Bidco Limited, a newly formed company indirectly owned by a limited partnership managed by Harwood Private Equity LLP, has made a recommended offer to acquire the entire issued and to be issued ordinary share capital of Frenkel Topping Group PLC. The offer is to be implemented through a Court-sanctioned scheme of arrangement under Part 26 of the Companies Act 2006, with the option to switch to a Takeover Offer if necessary.
**Key Points**
1. **Offer Details**
**Cash Offer** 50 pence in cash per share plus one Contingent Value Right (CVR).
**Alternative Offer** 10 pence in cash per share plus one Irwell Holdco Unit (comprising 1 penny Irwell Holdco Ordinary Share, 6 pence in Irwell Midco 1 Loan Notes, and 33 Irwell Holdco Preference Shares of 1 penny each).
2. **Contingent Value Right (CVR)**
Provides potential for additional deferred consideration of up to 10 pence per CVR, payable if the value of Irwell Holdco Ordinary Shares exceeds 100 pence per share on a future Exit Event.
3. **Valuation**
The Cash Offer values Frenkel Topping at approximately £64.0 million.
Including the 2024 Final Dividend, the valuation increases to £65.8 million, representing premiums of 12.9%, 19.5%, and 39.3% over recent share prices.
4. **Alternative Offer Cap**
Limited to 25% of Frenkel Toppings existing issued ordinary share capital, with excess elections subject to pro-rata scaling back.
5. **NASCITs Role**
North Atlantic Smaller Companies Investment Trust PLC (NASCIT), holding 29.96% of Frenkel Topping, is not subject to the Alternative Offer cap and has agreed to reinvest its entitlements into additional Irwell Holdco Units.
6. **Scheme Implementation**
Subject to Court sanction, shareholder approval, and Financial Conduct Authority approval.
Scheme Document expected in October 2025, with Court and General Meetings in November 2025.
7. **Independent Directors Recommendation:**
The Independent Directors recommend the Cash Offer as fair and reasonable, providing certainty and immediate value.
They are unable to recommend the Alternative Offer due to its complexity and variable impact on shareholders.
8. **Irrevocable Undertakings and Letter of Intent:**
Irwell Bidco has received support from shareholders representing 36.69% of Voting Scheme Shares and 55.66% of Frenkel Toppings ordinary share capital.
9. **Background and Rationale**
Frenkel Toppings strategy has focused on consolidating the personal injury and clinical negligence market, achieving revenue growth from £1 million in 2004 to over £37 million in 2024.
The Independent Directors believe the offer provides an opportunity to realize investment in full, addressing execution risks and market challenges.
10. **Future Plans**
Irwell Bidco intends to support Frenkel Toppings growth, implement efficiency measures, and pursue bolt-on acquisitions, while eliminating the regulatory burden of a public listing.
**Conclusion**
The recommended offer by Irwell Bidco provides Frenkel Topping shareholders with a choice between a certain cash exit and an alternative investment in the privatized company, reflecting a strategic shift towards private ownership to enhance growth and operational efficiency.