CareTech founders plot takeover of UK firm by matching rival cash bid

(Reuters) -The co-founders of social care services firm CareTech on Wednesday raised their takeover proposal for the British company to 850 million pounds ($1.11 billion) and matched a rival bid, while tabling another offer for investors seeking alternatives.

Sheikh Holdings, set up by CareTech founders Haroon Sheikh and Farouq Sheikh, increased its possible offer for the London-listed firm by 25 pence to 750 pence per share in cash. Asset manager DBAY had proposed a deal at the same price last week.

Sheikh Holdings also proposed that eligible holders could choose to trade some or all of their CareTech shares for a class of non-voting ordinary stock in the indirect parent of the new entity, but that would be limited to about 22% of issued shares.

DBAY’s offer for a partial non-voting share alternative was limited to 30% instead.

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

CareTech’s shares rose as much as 5.3% to 773 pence by 1512 GMT, before paring their gains. The company refused a Reuters request for comment.

Its second and eighth-biggest shareholders, Lombard Odier Asset Management and Richard Griffiths, respectively, have agreed to vote in favor of Sheikh Holdings’ proposals, the private family office said, adding that Griffiths also opted for the alternate offer.

($1 = 0.7688 pounds)

(Reporting by Radhika Anilkumar and Pushkala Aripaka in Bengaluru; Additonal Reporting by Sinchita Mitra; Editing by Amy Caren Daniel and Krishna Chandra Eluri)