Nanoco: Turner Pope

Nanoco Group plc (NANO) Follow | NANO

TPI is pleased to provide its latest research note on Nanoco Group plc (NANO.L)

Following receipt of its Final Litigation proceeds, Nanoco now proposes to return up to £33.0m to Shareholders. The Board has determined that, in order to provide Shareholders with flexibility and choice, the most appropriate means by which to return value is to conduct a Tender Offer (the ‘Tender Offer’) at a fixed price of 24p/share (the ‘Tender Price’), which represents a premium of 25.1% to the closing mid-market price per ordinary share on 8 March 2024, for up to £30.0 million. In addition, it also intends to return a further sum of up to £3.0 million by way of an on-market share buyback of ordinary shares (the ‘Share Buyback Programme’) to provide a continuing value-accretive return of capital to Shareholders. The Tender Offer is for up to 38.5% of the Group’s issued share capital (excluding those held in treasury), with the follow-on Share Buyback Programme providing potential to acquire a further 3.9% of its issued share capital (assuming it is undertaken at the Tender Price). 

The Tender Offer is conditional on Shareholders’ approval, for which a General Meeting (‘GM’) is to be held on 28 March 2024. Being within Nanoco’s previously announced commitment to return between £33.0m and £40.0m to shareholders, the c.£25.8m share of proceeds expected to be retained by the Group are intended to balance the investment needs of its growing organic business with a firm intention to deliver a material return of capital to shareholders. 

Given the value and opportunity the Group’s research and IP has successfully created, however, it remains surprising that Nanoco’s equity still prices in virtually nothing for the Board’s stated expectation that it will become a self-financing producer of high performing nanomaterials during CY2025.

We would draw your attention to the various disclaimers in the document both at the beginning and at the end of the note. Retail clients (as defined by the rules of the FCA) must not rely on the research document. In particular you should note that the research document is a non-independent marketing communication. The analyst who has prepared the research is aware that TPI provides research to Nanoco Group plc. Accordingly the research has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibitions on dealing ahead of its dissemination. 
 

The information in the document is published solely for information purposes and is not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. The material contained in the document is general information intended for recipients who understand the risks associated with equity investment in smaller companies. It does not constitute a personal recommendation as defined by the FCA or take into account the particular investment objectives, financial situation or needs of individual investors nor provide any indication as to whether an investment, a course of action or the associated risks are suitable for the recipient.