- Pawnbroker draws bid from American peer
- Cash bid represents a 44% premium to the share price
- Continued flow of deals suggests trade and financial buyers are still finding value in UK-listed companies
“Pawnbroker and jeweller H&T is the latest UK company to receive a takeover bid, and the 44% premium on offer from America’s Nasdaq-listed FirstCash is a further example of how trade or financial buyers are finding value in the London stock market,” says AJ Bell investment director Russ Mould.
“H&T’s board is recommending the 661p-a-share bid, which comprises 650p in cash and an 11p dividend. The shares are trading close to the cash element, to suggest investors are happy for the deal to go through.
Source: LSEG Refinitiv data
“The deal is worth around £290 million, with £73 million in net debt and leases on top, to take the total value of approaches, concluded or live, for UK listed and quoted companies in 2025 to some £11 billion, a useful supplement to the dividends and share buybacks on offer.
Source: Company accounts
“The 44% uplift relative to H&T’s closing share price on Tuesday also sits above the average 35% across more than 20 bids. That 35% average premium itself is not to be sniffed at, even if it is the lowest figure in the last five years, to perhaps ultimately reflect how the UK stock market has moved higher, despite all of the scepticism and opprobrium that it continues to attract.
Source: Company accounts. *Successful or ongoing open bids only.
“Even the 661p offer price values H&T on just 11.7 times forecast earnings for 2025 and implies a forward dividend yield of 2.8%. It is easy to see why FirstCash should swoop based on those numbers, H&T’s strong competitive position in its marketplace and robust financials.
“March’s full-year results for the year to December 2024 showed a healthy increase in profits – thanks to strong demand for the core pawnbroking service, where the pledge book grew by 26% – to lay the foundations for future earnings growth.
Source: Company accounts
“Jewellery sales were also strong, and the foreign currency business contributed positively. A soaring gold price is an added bonus at a time when the difficult macroeconomic environment means many consumers may be left looking for small-sum, near-term lending.
“H&T delivered record pre-tax profits in 2024, something that may have caught FirstCash’s eye, but the AIM-quoted stock was trading at a tiny premium to its book value per share of 442p before the bid, even though it was generating a post-tax return on tangible equity of 15%.”
Source: Company accounts
