The parent company of troubled lender Amigo Loans has said a proposed “reverse takeover’ deal is off.
Bosses at Bournemouth-based Amigo Holdings announced last month the company had entered an exclusivity agreement with Craven House Capital, in a bid to generate value for shareholders. The board had said the arrangement could see it acquire assets including music streaming service ONEBas and digital magazine platform Magazinos, in return for newly issued shares in Amigo and a cash subscription, expected to be at least £5m, for newly issued shares in the company.
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Amigo Loans is currently being wound down after it halted all lending in March. The company had faced financial difficulties after being ordered to make compensation payments to former and current customers over historical complaints.
In a trading update posted on the London Stock Exchange on Thursday (October 16), Amigo Holdings said the exclusivity agreement with Craven House Capital and “various individuals” had been terminated with immediate effect “at the request of the various individuals”.
Chief executive Danny Malone said: "This is disappointing news as the transaction, in the form of a reverse takeover of Amigo, offered a solution that could have provided a future for shareholders, offering some small value that wouldn't be available otherwise. As we continue the orderly wind-down of our lending business, we remain open to assessing other viable options that could be beneficial for our shareholders, our people and wider stakeholders."
The company said it would request that regulator the Financial Conduct Authority lift a temporary suspension on trading of the company’s shares on the stock market, which the firm had requested owing to the lack of information about the proposed transaction at the time.
In a statement, Amigo Holdings said if a viable alternative solution did not emerge, there would be “no value remaining” in the company for shareholders. It added that it could seek shareholder approval “in the near future” to delist from the London Stock Exchange and enter the company into a Members Voluntary Liquidation.
