Circle8 confirms proposal for possible cash offer for SThree

Circle8 Group Inc on Friday confirmed it has submitted a proposal to acquire larger peer SThree PLC in a possible cash offer, calling the proposed combination a "compelling strategic opportunity".

Shares in Circle8 were down 1.7% to USD0.56 on Nasdaq in New York in pre-market trading on Friday. The company has a market capitalisation of USD65.5 million. Shares in SThree were down 0.5% to £293.00 on Friday morning in London for a market cap of £357.7 million.

Circle8 is an Englewood Cliffs, New Jersey-based consulting, technology and business transformation platform, while London-based staffing organisation.

Circle8 said it believes combining the two companies would significantly increase the combined group's international scale, with combined gross revenue approaching USD3 billion.

Circle8 didn't disclose the price that it offered for SThree, but it said the proposed purchase would be entirely cash-financed, with no additional Circle8 shares to be issued, meaning existing Circle8 shareholders would not be diluted.

If the deal were completed, it would strengthen its technology capabilities and create opportunities across areas including artificial intelligence, cybersecurity, cloud and software engineering.

Chair & Chief Executive Guus Franke said: "Our ambition now is global, and we believe bringing Circle8 and SThree together could represent a transformational step toward achieving that ambition.

"This is not about becoming bigger for the sake of size. It is about taking the technology platform we have built in Europe and creating a substantially larger and stronger global IT and technology company while protecting the ownership interests of the shareholders who are with us today."

Circle8 noted that there is no certainty that it will make an offer, or on what terms. Under UK takeover rules, Circle8 must announce a firm intention to bid or walk away by October 7, unless the UK Takeover Panel extends the deadline.

Circle8's approach was confirmed by SThree on Wednesday.

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