Announcements late yesterday and this morning indicate that GB Group (GBG) may receive a cash offer for the business from private equity firm GTCR. I have held these shares since 2011 – first purchased at 42p, closed last night at 522p. It’s one of my larger holdings and needless to say I have been very happy with my investment as it has been one of the few AIM companies that has shown consistent growth in revenue and profits.
The share price touched over 900p in 2020 when I realised some profits but I bought back some more recently at near 400p. The current share price seemed fair to me – Stockopedia reports a prospective p/e of 25 – so I am in no rush to sell unless a significant premium is paid. As it is this would be another of my bigger holdings after Ideagen and EMIS that I might lose so I would end up with a big capital gains tax bill which I can do without.
There is a shortage of quality small cap stocks in which to invest and with cash paying so little in interest I would prefer the company was not taken over at this time. Let us hope the directors of GB hold out for a good offer and reject one that does not recognise the growth prospects for the company.
Roger Lawson (Twitter: https://twitter.com/RogerWLawson )
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