Eleco satisfies regulatory approvals for 235p-per-share cash takeover offer
Key Facts
Eleco and Avocet Bidco have satisfied all conditions relating to merger control, foreign investment and national security approvals in the UK, according to an announcement by Eleco published through the company announcement service. This marks progress in the cash takeover offer, but does not mean the deal is complete. Other conditions must still be met before the scheme becomes effective. The main outstanding requirements are court approval at the scheme sanction hearing and delivery of a copy of the court order to the registrar of companies. The company has set 20 November 2026 for the hearing and expects the scheme to become effective on 30 November, subject to the remaining conditions being satisfied or waived where permitted.
The recommended offer provides for 235p in cash for each Eleco share, valuing its fully issued and to-be-issued share capital at about £207.6 million. Eleco announced the offer on 10 September 2026, representing a 74.7% premium to the closing share price of 134.5p on 9 September, the day before the deal was announced. The offer announcement valued the enterprise at about £192.4 million, equivalent to about 20.2 times EBITDA for the year ended 31 December 2025. Eleco's board said the terms of the takeover were fair and reasonable and unanimously recommended that shareholders vote in favour of the scheme. At the time the offer was announced, irrevocable undertakings and letters of intent covered 45.2% of the issued share capital as at 9 September.
Shareholder approval of the scheme and the resolution to implement it was secured on 27 October 2026, according to the company's announcement. The deal has therefore moved to completion of the remaining court and regulatory procedures, after securing merger control, foreign investment and national security approvals. Court approval remains a key condition for the scheme to become effective, alongside delivery of the court order to the registrar of companies. The company expects the scheme to become effective on 30 November, subject to the remaining requirements being fulfilled or waived in accordance with the deal terms. The timetable puts the court hearing scheduled for 20 November ten days before the expected effective date of the takeover.
Under the timetable announced by Eleco, the company expects 27 November 2026 to be the last day for trading in its shares and registering transfers. Trading in the shares on AIM is also expected to be suspended by 7:30 a.m. on 30 November, in line with the expected effective date of the scheme. The shares are expected to be delisted at 7:00 a.m. on 1 December. These dates remain part of the deal's expected timetable, while their execution is subject to court approval and the remaining conditions being met. The company has set 10 March 2027 as the long-stop date for the scheme to become effective, unless extended under the terms set out in its announcement.
The offer is a cash deal recommended by Eleco in favour of Avocet Bidco, a company formed for the purpose of the acquisition and indirectly owned by funds managed or advised by Accel-KKR and its affiliates. In its first-half 2026 results, Eleco said revenue rose 8% to about £19.9 million, compared with about £18.4 million in the same period of 2025. Annual recurring revenue was £35.5 million, up 16% from £30.7 million in the first half of 2025. The company also reported cash of £15.4 million as at 30 June 2026 and said the group remained debt-free. The interim results said the board did not intend to declare or pay any further dividends before the takeover became effective, following the deal's announcement on 10 September 2026.
In economic data published the day before the announcement that the approvals had been secured, the UK's Office for National Statistics estimated real GDP growth of 0.7% in the third quarter of 2026 compared with the second quarter, following growth of 0.5% in the second quarter. On an annual basis, GDP was 1.9% higher than in the third quarter of 2025. The ONS attributed most of the quarterly growth to a 0.9% increase in services, while production rose 0.1% and construction fell 0.7%. In separate data, the ONS reported that manufacturing output increased 0.7% in September compared with August and rose 0.9% in the third quarter. Eight of 13 industrial subsectors recorded growth in the quarter, led by computer, electronics and optical products, which rose 4.6%.