Discussions concerning a poss
The Paragon Group of Companies PLC ('Paragon' or the 'Company')
15 September 2008
Discussions concerning a possible offer terminated
During recent weeks the Board of Paragon has undertaken discussions with parties who approached the Company with a view to making an offer for the Company. These discussions culminated in the Board receiving a proposal in relation to a possible offer for the Company at a price of 125 pence per share in cash, which the Board does not consider to be acceptable. Having taken account of the views of its leading shareholders, the Board has informed the proposed offeror that it does not intend to pursue the proposal any further.
Although other discussions have been taking place during this period, the Board does not believe that these discussions are likely to result in an offer being forthcoming which it would consider to be acceptable. The Board has therefore terminated all current discussions. This announcement is made without the agreement or approval of the potential offerors. The Board has taken financial advice from UBS Investment Bank.
Following the rights issue undertaken in February 2008, Paragon's assets remain match funded to maturity. As of 31 March 2008, the Paragon Group has net assets of £612.8 million, equal to 205 pence per share outstanding. In the absence of an acceptable offer for the Company, the Board intends to continue to pursue the delivery of value for shareholders over time from Paragon's high quality book of buy to let and consumer loan assets, and by using the Paragon Group's skills, resources and business platform to develop other revenue generating activities.
Trading update
Consistent with the Interim Management Statement on 16 July 2008, the Company has continued to trade in line with management's expectations during the eleven months to 31 August 2008, with small positive variances in net interest income and costs balanced by reduced other income and increased impairments. Arrears in the consumer books remain stable and whilst arrears over three months within the buy to let books have risen over the summer months they remain significantly below the industry average. The small increase in impairments has resulted from the higher buy to let arrears and the decline in house prices.
Lending activity remains consistent with the Interim Management Statement on 16 July 2008, with first mortgage lending mainly limited to further advances, and secured personal finance lending marginally higher than for the same period last year. The redemption rate within the buy to let book has reduced during the summer months compared to the average monthly rate for the year to date, in line with management's expectations.
For further information, please contact:
The Paragon Group of Companies PLC
Bob Dench, Chairman
Nigel Terrington, Chief Executive
Nick Keen, Finance Director
Tel: 0121 712 2024
UBS Investment Bank
Adrian Haxby
Patrick Porritt
Neil Patel
Tel: 020 7568 8000
Fishburn Hedges
Morgan Bone
Andy Berry
Tel: 020 7839 4321
UBS Investment Bank is acting as financial adviser and broker to Paragon and no-one else in connection with the subject matter of this announcement and will not be responsible to anyone other than Paragon for providing the protections afforded to clients of UBS Investment Bank or for providing advice in relation to any proposed offer for the Company or any other matter referred to herein.
This information is provided by RNS
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