Rotala may go into private ownership after three of its Directors – Chief Executive Simon Dunn, Managing Director – North West Bob Dunn and Non-Executive Chairman John Gunn – made an indicative proposal to purchase the business’s entire share capital that they, their spouses and their personal pension plans do not already own.
The company is currently listed on the Alternative Investments Market, and has been since formation in 2005. The three Directors involved in the possible move into private ownership currently hold around 37.6% of Rotala issued share capital in ordinary shares of 25p. The possible offer values each outstanding share at 63.5p and will be paid in cash if accepted.
Simon Dunn has declined to elaborate on the motivation for the possible share offer, noting regulatory rules that prevent the release of any detail beyond that published by the London Stock Exchange. The offer would be made by a newly incorporated entity established by the three Directors (and their spouses and certain personal pension plans), that note states.
Regulatory codes now require that the newly incorporated entity must now announce by 17 October whether it has a firm intention to make an offer for the share capital involved, although that deadline may be extended.
Rotala has formed a committee of three independent Directors to consider the possible offer. They are Non-Executive Deputy Chair and Senior Independent Director Graham Spooner; Independent Non-Executive Director Graham Peacock; and Group Finance Director Kim Taylor.
The group purchased three businesses in the 18 months leading up to announcement of the possible offer, in the respective bus operations of Claribel Coaches and Johnsons Coaches, and the Midland Classic operation in its entirety. All are in the process of being incorporated into Rotala’s Diamond Bus brand and were the latest in a string of Midlands operations purchased by Rotala.
Meanwhile, its presence in Greater Manchester will shortly reduce with commencement of the first tranche of bus franchising on 24 September. However, the group’s most recent annual report notes that the associated disposal of assets there was scheduled to generate £7.5 million more than their book value at the time of the document’s publication.
That released capital was returned to shareholders via a £10 million buy-back in early 2023. Over three-quarters of those shares were cancelled after purchase, with the remainder taken into treasury. Each share purchased via that exercise was valued at 55p.