UA BOARD KEEN TO ACCEPT £53M OFFER By Ian Ashbridge
NEWS THAT Scotland’s largest livestock marketing business, the UA Group, is under offer with a price tag of £53m caused the group’s share value to gain 20% on Tuesday (Nov 23).
UA’s directors announced on Tuesday morning that a cash offer for the firm’s share capital had been formally made, and the board unanimously urged shareholders to accept the bid. The deal values ordinary shares at £14.70 a share and £1 in cash for each preference share.
The UA Group also operates in the property sector. Group turnover in the year to Jan 31, 2004, was 16.3m and profits hit £390,000. Marketing director David Leggat said negotiations had begun in August with Scottish property developer Elphinstone Land, following a £12.5m property deal where both firms discovered a degree of “cultural compatibility”.
“Our five-year plan has been to maximise share value by focusing on property development.” The sale of former stock-holding land near Inverness and re-investment of funds had helped to increase share value, he added.
But Mr Leggat said the sale to a property firm would not be at the expense of UA Group’s livestock marketing business, which controls about 25% of the market in Scotland.
“Part of the offer is that Elphinstone Land will keep the livestock marketing business going, and all staff will remain with the firm, as will the meat business and rural surveying activities.”
And advanced plans for a new livestock market at Stirling, which the firm has operated for almost 50 years, would go ahead, he added.
“In the offer document, there are undertakings by Elphinstone Land to disclose their plans for the business, and two UA Group farming directors will stay on as consultants on a new mart advisers’ board.”
More than 90% of staff hold shares in the firm, he said, and the majority of shareholders are farmers or “rural land stewards”.
“About 30% of shareholders have now signed irrevocable agreements to say they would accept the terms, and our board gave unanimous approval to the offer.”
It is understood that Elphinstone Land and UA Group chairman Peregrine Moncrieffe are now to write to shareholders urging them to accept the offer. Shares closed on Tuesday (Nov 23) at £14.25.
Andy Robertson, chief executive of NFU Scotland, welcomed the news. “UA Group is an important part of Scotland’s livestock sector and we and our members will be reassured that the existing business strategy is to be continued under the [likely] new ownership.” Elphinstone Land’s commitment to the live auction business was a vote of confidence, he added.