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Transact board urges against sale

The heads of Transact have written to shareholders recommending that they vote against a potential trade sale or flotation due to the current market conditions.

Every two years, the platform’s board considers the market position in terms of a potential sale or flotation and puts its findings to class A shareholders in a general meeting. This meeting is scheduled for May 2.

Since April 2006, when this amendment to the original shareholder contract was put in place, the business is thought to have increased in value but all tentative approaches considered have been deemed unsuitable.

The Transact board says interest in the wrap market has increased, notably with the flotation of Hargreaves Lansdown last summer, but this has been followed by worsened economic conditions which mean that the appetite for wraps has diminished again.

The letter, co-written by chairman Mike Howard and managing director Ian Taylor, says: “With particular regard to the current environment of continuing financial turmoil, the board considers that it would be wholly inappropriate to proceed with an immediate and ‘forced’ sale of the business at this time.”

Transact says it reserves the right to bring forward the next biennial meeting if conditions require a review before that time.

Transact was established in 1999 and increased profits from £4.11m to £7.75m for the year ending September 2007.

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