Sunderland-based sofa and carpet retailer SCS (LSE: SCS) is set to exit the London Stock Exchange following a £100 million acquisition deal with Italian furniture retailer Poltronesofà.
SCS saw a significant surge in its stock price, climbing over 60% during morning trading after accepting a cash offer of 270p per share along with a final dividend of 10 pence per share from Poltronesofà.
The acquisition, valued at £99.4 million, represents a 66% premium on SCS’ most recent closing price. Poltronesofà, renowned for its extensive retail network across Europe, expressed particular interest in SCS’ well-established e-commerce operations. With around 100 stores in the UK operating under its own brand, along with Snug, SCS is expected to seamlessly integrate into Poltronesofà’s European expansion plans.
This move marks the latest trend of London-listed companies opting to go private amid challenging market conditions. Small and medium-sized firms have been departing from the London Stock Exchange at an average rate of one per week, prompting concerns within the Treasury and City circles. Efforts are underway to rejuvenate the London market’s appeal, as it faces criticism for undervalued stocks and increasing private equity takeovers.
Alan Smith, SCS’ non-executive chair, expressed unanimous board approval for the acquisition, stating, “The SCS Board believes Poltronesofà will bring significant benefits to SCS through its broad industry expertise, in addition to providing the necessary capital that would accelerate our current strategy, albeit in a private rather than public sphere. The acquisition will enable SCS to continue as part of a broader, pan-European entity in pursuit of its strategy and position it for long-term success in the UK.”
