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(Sharecast News) - Pawnbroker Ramsdens said on Tuesday that it has agreed to be taken over by US firm FirstCash in a 206m deal.
Under the terms of the transaction, FirstCash will pay 609p per share. This comprises 600p in cash and permitted dividends of up to 9p per share. The offer represents a premium of 35% to the closing Ramsdens share price on Monday.
FirstCash has more than 3,300 locations in the US, Latin America and the UK. Its stock trades on the US Nasdaq market with a market cap in excess of $10bn.
It said Ramsdens represents "a compelling opportunity for FirstCash to further grow its business in the UK market through the acquisition of a highly complementary business and will further cement FirstCash's position as the largest publicly traded pawn platform in the US, Latin America and the UK".
Ramsdens chief executive Peter Kenyon said: "I am exceptionally proud of the group's transformational growth since our initial public offering on AIM in February 2017. Less than a decade on, we have added 50 Ramsdens stores to the UK high street, created over 300 jobs and significantly grown our profit before tax. I remain highly confident that there are significant opportunities for further growth over the coming years.
"FirstCash is an internationally established sector leader, and I share their confidence and conviction in the outlook for Ramsdens, which is underpinned by our diversified model and established reputation for consistently doing the right thing for our customers and our fantastic people."
At 1001 BST, Ramsdens shares were up 31% at 591.96p.
Broker Shore Capital said: "Given the elevated gold price and the extent to which this has supported recent earnings momentum, we view current profitability as cyclically flattered. As such, we believe the offer is best assessed on a balance sheet basis rather than on peak earnings multiples, and in this context the premium to NAV appears particularly attractive.
"Taken together, we view the terms as highly compelling and would strongly recommend that investors accept the offer, in our view."
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