Science Group Realizes Significant Profit from Ricardo Investment
Why we think this is very good
The RNS announcement details the sale of Science Group's investment in Ricardo plc at a 102% premium to the prior share price, generating a pre-tax net return of around 70%. This is a highly positive outcome for the company, as the cash proceeds of £53.5 million will be materially accretive to Science Group's financial position. The sale represents a transformational event for the company, justifying a 'Very Good' sentiment score despite the lack of a profit upgrade or trading ahead statement.
Key Points
- Science Group sold 12,443,655 shares in Ricardo plc, equivalent to 19.99% of the issued share capital
- The sale price of 430 pence per share represents a 102% premium to the prior Ricardo share price
- The cash proceeds of approximately £53.5 million will be materially accretive to Science Group's financial position
- The pre-tax net return on the investment is anticipated to be around 70%
- Science Group supports the WSP offer for the entire issued and to be issued share capital of Ricardo
Summary
Science Group has announced the sale of 12,443,655 shares in Ricardo plc, equivalent to 19.99% of the issued share capital, at a price of 430 pence per share. This represents a 102% premium to the Ricardo share price prior to Science Group's investment. The cash proceeds of approximately £53.5 million will be materially accretive to Science Group's financial position, and the pre-tax net return on the investment is anticipated to be around 70%. The Board intends to retain the proceeds for future strategic investments and corporate opportunities.