Sagentia Group, the research and development outsourcer, has seen a sharp drop in its share price after announcing an £8m tender offer.
Sagentia had a very tricky period in 2009 but has staged an impressive recovery since, gaining 575%.
The board has considered several sale and merger offers but decided they did not value the company at the right level.
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The problem, then, for shareholders is how to cash in on the significant paper gain the stock has enjoyed, with monthly volumes at only 1.5% of issued capital.
To correct this, the board has offered to buy £8m worth of shares from shareholders who may want to take profits on their stock. The "tender" offer has been made at 80p per share, more than four times the average price during 2009 and double the price of a share placing in May 2010.
By 11:18, the stock had dropped 11% to 83p, reflecting the tender offer price.
Over 2011 Sagentia saw revenues grow 13% to £23.6m. Profit before tax rose 55% to £3.3m, while operating profit gained 54% to £3.9m.
Net cash funds at the end of the year were £14.1m.
BS
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