Britain's CareTech agrees to co-founders' $1.1 billion buyout deal

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REUTERS/Leonhard Foeger

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  • 750p/share offer represents 23% premium to previous close
  • Sheikh Group to be controlling shareholders after deal
  • CareTech board constitutes panel to evaluate cash offer

June 27 (Reuters) - Britain's CareTech (CTH.L) has agreed to be bought by a consortium led by its co-founders for about 870.3 million pounds ($1.1 billion) as the social care services firm opts for its founders' experience to steer the ship over a rival bidder.

Shares in the company jumped about 22% to 745 pence early on Monday after CareTech announced the deal and was trading 21% higher as of 1234 GMT.

The offer valuing the London-listed group's shares at 750 pence apiece in cash was first revealed in April, when Sheikh Holdings raised their bid by 25 pence to match a rival proposal from asset manager DBAY Advisors.

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DBAY, which in April made its 750 pence apiece proposal to buy CareTech, said later on Monday it would not make an offer, backing out of the bidding war.

Hertfordshire-based CareTech, which offers housing and care services to adults with learning impairments and physical disabilities, is the latest among a host of British firms being bought out or becoming the target of potential buyers.

Following Monday's deal, which has the support of the company's board, the Sheikh Group will be the controlling shareholders of CareTech. The co-founders will remain involved in the management of the company along with the existing management, the company said.

"CareTech operates in a complex and operationally demanding sector and as such it is important that it will continue to benefit from the vast experience of the founders," the London-listed company said in a statement.

The CareTech board has formed a panel comprising independent directors for evaluating and recommending the offer to CareTech shareholders, the company said.

Amalfi Bidco, the consortium created for the acquisition, includes Sheikh Holdings, set up by CareTech founders Haroon Sheikh and Farouq Sheikh, and fund management firm THCP Advisory Ltd.

($1 = 0.8146 pounds)

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Reporting by Aby Jose Koilparambil in Bengaluru; Editing by Rashmi Aich, Subhranshu Sahu, Emelia Sithole-Matarise and Louise Heavens

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