Thorn Group Ltd (ASX: TGA) shares are having a bumper session on Friday. At the time of writing, the Thorn Group share price is trading 7.32% higher at 22 cents after the company received an unsolicited on-market takeover bid.
Thorn Group shares are well in the green today after the company announced Somers Limited is making an on-market, unconditional cash offer to acquire it for 21 cents per share.
Somers is a financial services investment holding company listed on the Bermuda Stock Exchange. The company’s core investments are primarily in banking, asset financing and wealth management sectors across Australia, the United Kingdom and Bermuda. Somers has about US$625 million in funds under management.
The Thorn Group share price closed Thursday’s session at 20.5 cents, so today’s offer isn’t quite the premium takeover offer ASX shareholders often see.
However, Somers’ bidder statement said that:
This [the offer] may be attractive for Thorn Shareholders given the risks and uncertainties associated with remaining a Thorn Shareholder including, but not limited to:
a) the long term impacts of the COVID-19 pandemic on Thorn’s borrowers and their businesses; and
b) general economic and equity market risk
Thorn Group response
Thorn Group has advised that its shareholders should take no action in relation to the offer.
The company has established an independent committee to assess and respond to the Somers offer.
Until then, the company will continue to operate ‘business as usual’.
Its been an ugly ride for the Thorn Group share price
Thorn Group provides alternate consumer and commercial leasing products, with one of its divisions better known as Radio Rentals. The company also provides financial products and services, tailored to the needs of Australian SMEs.
In its prime, Thorn Group was a highly profitable business delivering solid year-on-year growth. Back in FY15, when its shares were fetching more than $2.00 apiece, the company delivered a 25.1% increase in revenue to $293.8 million and a 13.6% increase in underlying cash net profit after tax (NPAT) of $34.2 million.
Fast forward to today, the company is attempting to turn things around, announcing a forecast NPAT of $8.4 million for FY21, after an $81 million loss in the previous year.
The Thorn Group share price is up 10% year to date, but down by almost 90% since its 2015 highs.