Benchmark for sale; laments ‘illiquid nature’ of shares

Sheffield-based Benchmark Holdings said its board has decided to “undertake a formal review of the company’s strategic options including, but not limited to, a sale of the company as a whole or alternatively the potential sale of one or more individual business units …”

Benchmark, an aquaculture biotechnology company, said the move is being undertaken to “establish whether there is a bidder or bidders prepared to offer a value for the company or its individual business units that the board considers attractive relative to the board’s view of intrinsic value.”

The Sheffield firm said its board believes that its current share price “materially undervalues the combined value of Benchmark’s businesses and the long-term prospects of the company, which may at least in part be due to the tightly held and illiquid nature of its ordinary shares.”

Benchmark added in a stock exchange statement: “Management actions over the last three years have delivered substantial revenue growth and improvement in profitability and cash conversion.

“Since FY20, Benchmark’s revenue from continuing operations has grown from £105.4m to £169.5m in FY23 and Adjusted EBITDA has increased from £15.5m to £35.5m.

“The company is well positioned with a strong balance sheet and significant headroom to grow within its existing markets, as well as multiple potential avenues for expansion.

“For the full year ended 30 September 2023, Benchmark delivered 7% revenue growth, 15% increase in adjusted EBITDA and improved its operational cash conversion from 35% to 58%, demonstrating  continued progress in the year despite challenging conditions in the shrimp sector, one of the company’s core markets …

” … the company has agreed with the UK Takeover Panel that any discussions in relation to an offer for the company may take place within the context of a formal sale process (as set out in Note 2 on Rule 2.6 of the Code) to enable conversations with parties interested in making such a proposal to take place on a confidential basis.

“The Panel has granted a dispensation from the requirements of Rules 2.4(a), 2.4(b) and 2.6(a) of the Code such that any interested party participating in the formal sale process will not be required to be publicly identified as a result of this announcement and will not be subject to the 28 day deadline referred to in Rule 2.6(a), for so long as they are participating in the formal sale process.

“Parties interested in making a proposal should contact Benchmark’s financial advisers, Evercore and Rabobank …

“The company is not currently in any discussions with any potential offeror relating to an acquisition of the issued and to be issued share capital of the company.

“Following this announcement, the company is now considered to be in an ‘offer period’ as defined in the Code …

“Shareholders are advised that there can be no certainty that an offer for the company will be made or a sale of individual business units undertaken, nor as to the terms on which any offer or sale will be made.”