Redcentric (LSE:RCN), the UK IT managed services provider, will propose an equity tender offer at 160p per share as a material return of capital following completion of the sale of its entire data centre business.
The Board says the tender is expected to return in excess of £90 million to shareholders, funded from proceeds that included an initial £115.4 million received on 30 April with the remaining consideration expected by 31 July after post-completion adjustments, and the Group will reduce its Revolving Credit Facility from £60 million to £30 million while lowering the drawn facility from £40 million to approximately £19 million.
"This transaction crystallises significant value for Redcentric shareholders and allows us to return the majority of the proceeds directly to them," said Richard McGuire, Non-Executive Chairman.
A circular setting out full details of the tender offer is expected in June with settlement anticipated in July, the tender will be conditional on the previously announced Capital Reduction process and the Board retains authority to make on-market buybacks of up to 7.95 million shares, the company said.
The Board says available capital, together with the MSP business's profitable outlook and cash generation profile, should be sufficient to support organic growth while term deposits have been arranged to generate income until distributions are made.
