3i To Buy Rest Of 3i QPEP; GBP110 Million Inflow To Help Cut Debt
23 February 2009 - 9:05PM
Dow Jones News
U.K. private-equity company 3i Group PLC (III.LN) Monday said it
is buying the rest of 3i Quoted Private Equity PLC (QPE.LN) that it
doesn't own and in the process would gain some GBP110 million to
help cut its GBP2.2 billion debt.
3i said its planned acquisition of the remaining 55.1% will be
done through a solvent liquidation of QPEP, where a liquidator
would transfer QPEP's assets to 3i after 3i pays QPEP shareholders
with some cash and new 3i shares.
The move comes just days after 3i sold 77 million shares at 79
pence a share in 3i Infrastructure PLC (3IN.LN), a unit that
invests in infrastructure assets.
The company has said that it is looking at various options to
cut its debt.
Analysts have said the company must sell many more assets in
order to meaningfully cut its debt.
Under the new deal, each shareholder in QPEP, a company that
invests in smaller public companies, would get 50 pence a share in
cash and about 17% of each new 3i share. This values each QPEP
share at 88.8 pence.
This is equal to the net asset value of QPEP shares on Jan. 31
and is 32% higher than QPEP's closing price of 67 pence Friday.
3i said it will issue 37.6 million new shares, which represent
8.9% of the 3i's enlarged share capital.
With QPEP holding some cash of around GBP240 million and the
cash transaction costing some GBP130 million, 3i is expected to
have a net cash inflow of GBP110 million after completing the deal,
spokesman Patrick Dunne said.
At 0925 GMT, 3i shares were up 0.8% at 219 pence, while QPEP
shares were up 29% at 85 pence. The FTSE 100 index was up 1%.
Company Web site: www.3i.com
-By Vladimir Guevarra, Dow Jones Newswires, Tel. +44 (0)
2078429486, vladimir.guevarra@dowjones.com
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