Frenkel Topping, best known for giving financial advice to seriously injured claimants with large awards, has approached the company that owns National Accident Helpline over a potential acquisition.
Its target is Bush & Co, NAHL Group’s case manager and rehabilitation subsidiary that supports serious and catastrophic injury victims.
This could lead to the claims management business and associated law firm being sold off.
Both are listed businesses, and Frenkel Topping Group plc – which has just taken a 6% share in NAHL – confirmed to the stock exchange this morning that it has made “an indicative non-binding proposal” for an all-share acquisition.
As well as National Accident Helpline and Bush & Co, NAHL owns an alternative business structure, has a 50% share of two more – all of which are focused on lower-value personal injury claims – and delivers conveyancing leads through Fitzalan Partners.
The announcement said: “Frenkel Topping believes that there is a clear strategic, operational and financial rationale to combining these two complementary businesses that focus on providing excellent professional support to the victims of life changing injury, incident or clinical negligence.
“Frenkel Topping believes that a combination would be compelling to both sets of shareholders and to the broader stakeholders of both companies.
“Frenkel Topping is mindful that the combination is subject to due diligence and would require a careful assessment of the position of NAHL’s consumer legal services division within the combined group and that this may lead to a divestment of the division in due course.”
The company said Harwood Capital – which owns 13% of NAHL – is supporting the deal.
In its statement, the board of NAHL said simply that it was “considering the proposal”.
Under stock exchange rules, Frenkel Topping has until 21 October to announce whether or not it is going to make a formal offer.
Published yesterday, NAHL’s interim results – which recorded the “most challenging” six months in the group’s history – showed that the critical care division performed better in the first half of 2020 than the consumer services division: critical care’s turnover was down 12% to £5.7m and profit down 19% to £1.9m, compared to consumer services’ turnover falling 25% to £14.5m and profit nearly halving to £2.5m.
Frenkel Topping’s interim results for the first half of 2020 recorded a 9% increase in revenue to £4.4m and gross profit up 10% to £2.5m. It has nearly £1bn of assets under management.
News of the possible offer has given a huge boost to NAHL’s share price, which has long been on the decline since its 2015 peak of 404p.
The price crashed in February to 56p after the group said uncertainty in the personal injury market would significantly affect its performance in 2020, and went as low as 34p as the whole market dived in response to the pandemic.
But the shares were up 26% in early trading this morning to 62p. Frenkel Topping’s shares were up a far more modest 2%.