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05 Mar 2021 | 07:03

Aggreko agrees £2.3bn sale to private equity groups

(Sharecast News) - Aggreko has agreed to be bought by two private equity firms in a cash deal valuing the FTSE 250 company at £2.3bn. TDR Capital and I Squared Capital Advisors will pay 880p for each of the power generator supplier's shares. The price is 39% more than the closing price on 4 February, the day before an offer period started, and 49% more than the average price in the preceding three months.

Aggreko has been in talks with the buyout groups for the past month after revealing the firms had approached it about a takeover. The price agreed is the same as the potential offer TDR and I Squared had made in February.

The company announced a final dividend of 10p a share on 1 March. If the dividend is paid before the deal completes the offer price will be reduced.

Aggreko said it accepted the offer because it was an attractive cash price that fairly recognised its prospects.

The company provides power generators for events ranging from the Glastonbury pop festival to the Olympic Games. Its business was hit by the postponement of the Tokyo Olympics and other sports fixtures, festivals and events during Covid-19 lockdowns worldwide but it said on 1 March its markets were recovering.

Ken Hanna, Aggreko's chairman, said: "We believe that the business, its people and customers will continue to be well supported with I Squared Capital and TDR Capital as shareholders bringing their expertise in energy and rental markets to support our existing strategy."

Private equity firms have been circling UK companies to capitalise on valuations that have failed to keep pace with the recovery in other stock markets with the global economy expected to rebound from the Covid-19 crisis.

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