British pawnbroker Ramsdens has agreed to a £206 million takeover by its US rival, FirstCash.
The deal will see Ramsdens delisted from London’s Alternative Investment Market (AIM), nearly a decade after its shares were floated, bringing it under new American ownership.
Shareholders are set to receive up to 609p per share, an offer representing a 35 per cent premium on its latest closing price, valuing the business’s entire share capital at approximately £206 million, including dividend payments.
FirstCash, a major international pawnbroking operator with around 3,300 sites across the US, South America, and the UK, is listed on the Nasdaq.
The US firm stated that acquiring Ramsdens’ 174 stores will bolster its UK expansion, particularly targeting areas in the north of England and Scotland where Ramsdens has a greater presence.
It will gain the British firm’s pawnbroking business – through which people can take out a loan against the value of a piece of jewellery or watch – as well as its precious metals buying service, jewellery shop, and foreign exchange unit.
Ramsdens, which is based in Stockton-on-Tees in County Durham, has seen its earnings boosted by the rising price of gold this year.
The most recent spike occurred at the beginning of March following the escalation of conflict in the Middle East, with gold hitting around 5,400 US dollars (£4,081) an ounce.
Ramsdens said this encourages more people to come into shops to sell unwanted jewellery, which it can then sell on for a profit.
But the volatility of prices means its performance could weaken in the future, making the acquisition a good safety measure for shareholders, according to the business.
FirstCash said cost savings could be made by combining some head office and administrative functions.
Peter Kenyon, the chief executive of Ramsdens, said: “I am exceptionally proud of the group’s transformational growth since our Initial Public Offering (IPO) 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.”
Ramsdens’ share price soared by about 30 per cent following the announcement.
