Funeral firm Dignity in talks with consortium over £260m takeover

Funeral firm Dignity has said it is in advanced talks with a consortium linked to its former chief over a potential takeover after receiving bids last year.

The London-listed company told shareholders late on Wednesday that it is currently in discussions with the consortium comprised of SPWOne V Ltd and Castelnau Ltd.

Gary Channon, former chief executive officer of Dignity, is working as chief investment officer for the consortium’s investment manager Phoenix Asset Management Partners.

Dignity confirmed it first received a proposal regarding a 475p per share cash offer on October 13.

It said it subsequently received proposals of 500p and 510p per share for the business, which were all “unanimously rejected”.

However, Dignity had remained in talks with the group after it put forward a 525p per share proposal on November 13.

The funeral services firm said it has since agreed to provide the consortium with access to limited confirmatory due diligence.

It is understood the latest 525p per share proposal would value Dignity at more than £260 million.

Dignity said it and advisers at Rothschild & Co have indicated that the latest proposal is “at a value that Dignity would be minded to recommend” to shareholders for approval.

“There can be no certainty either that an offer will be made nor as to the terms of any offer,” it added.

Sir Peter Wood, founder of the SPWOne investment vehicle, said: “Dignity has long-term growth potential – the signs are clear to me.

“But the changes and significant development work and investment needed to enable this growth mean the best way forward for Dignity is as a private company.”

Mr Channon said: “We strongly believe that the changes needed to unlock the potential of Dignity are better implemented as a private company.”