SMALL CAP MOVERS: Sureserve accepts private equity takeover bid

It appears that Sureserve is to join the growing list of companies abandoning a listing in London after agreeing to a takeover from pan-European private equity group Cap10.

A new vehicle formed by Cap10 will pay 125p per share in cash, valuing the AIM-listed social housing maintenance specialist Sureserve at £214million, a 39 per cent premium to Thursday’s closing price.

Alarmingly for AIM, Sureserve said that going private will give it the right access to capital or funding, allowing it to grow organically through acquisitions and organic growth.

These are all things the junior market was set up for.

Sureserve will join the likes of Network International, THG, John Wood Group and Industrials REIT, all of which have jumped on the take-private bandwagon driven by dry powder-rich private equity funds.

: Based in Dartford, the core of Sureserve’s business is providing gas and heating inspection, installation and maintenance services to social housing groups

Sureserve’s board has recommended the deal, with two of its largest shareholders, Harwood Capital and Miren Rawlings, speaking for 23.4 per cent, accepting the offer.

Based in Dartford, the core of Sureserve’s business is providing gas and heating inspection, installation and maintenance services to social housing groups, with the goal of making housing stock and buildings more energy efficientx.

The company had originally listed on the main market in 2015, but switched to AIM in 2017.

Sureserve quickly surged following the take-private announcement, rallying over 37 per cent to 123p, just shy of Cap10’s offer valuation.

In the heavy industries, UK Oil & Gas was also on a tear at the close of the week, advancing over 15 per cent after reporting oil shows in the Pinarova-1 well in Turkey, where drilling will continue following a phase of testing.

Testing is expected to run over the coming weekend, though UKOG cautioned that it may be impacted by the end of Ramadan on Thursday and may affect timings over the weekend.

Small-cap explorer Unicorn Mineral Resources plc saw its share price soar more than 20 per cent higher to 7p on the news that it has been granted a permit to drill at its Kilmallock project in Ireland’s Limerick basin.

Responding to the permit win, chief executive Richard O’Shea said: ‘I look forward to an active exploration programme and some good news for shareholders over the coming years.’

On the bearish side of the resources sector, Echo Energy plc plummeted over 50 per cent after the company flagged a fall in production at its Santa Cruz Sur assets in Argentina.

Echo also mentioned that it is currently mulling a proposal from a significant Argentine investor to inject cash and assets into the business, while the board explores financing options to secure additional working capital resources.

Gas exploration company IOG plc also had a tough week, having seen a quarter of its market capitalisation wiped after reporting pressure issues and an influx of non-commercial quantities of gas in the Blythe-2 well drilling programme, which are expected to result in delays.

The gas comes from a reservoir that is not the well’s target which, according to IOG, remains isolated and separate.

Switching gears to the medical technology sector, Kromek Group plc was far and away the top AIM performer, soaring over 57 per cent to 8.37p, and for good reason.

On Tuesday, Kromek announced a seven-year contract win with a top medical imaging manufacturer to integrate the group’s cadmium zinc telluride-based detector technology into the medical imaging scanners of the customer. Analysts at house broker finnCap called it a ‘game-changing’ contract.

The following day, Kromek announced another major contract win, this time to integrate its technology into medical imaging and security scanners with CT scan specialist Analogic Corporation.

Cancer therapy developer Advanced Oncotherapy plc also ripped over 50 per cent higher after announcing a possible listing on Nasdaq.

To facilitate this, Advanced Onco has started a review of all options available ‘including a possible sale to NASDAQ-quoted corporate vehicles’ and has therefore commenced a formal sale process.

Advanced Onco’s shares were changing hands at 3.98p with a market capitalisation of £21million on Friday afternoon.

Finishing this week’s round-up with a bit of a stumper, forestry and timber trading group Woodbois said it was ‘shocked’ to receive a notice from lender Sydbank that it was termination the US$6million debt facility Woodbois’ Danish subsidiary Woodgroup ApS.

Sydbank cited Woodgroup’s first-quarter losses as justification for the termination, but in a statement, Woodbois said: ‘Management do(es) not agree with Sydbank’s conclusion and, whilst acknowledging the poor performance in the first quarter, believed the company had been well placed to deliver a very positive performance for the remainder of the year.’

Regardless, shares were chopped 60 per cent lower to 0.38p as a result.

The AIM All-Shares Index closed the week half a percent lower, underperforming against the FTSE 100 and FTSE 350 indices, which both closed around half a percent higher.