Clinton Cards plc this morning had dealings in its shares suspended on the London Stock Exchange following an overnight coup by American Greetings Corporation – a move which may see AGC acquire some of the Clintons business via a pre-pack administration.
In short: AGC acquired Clintons debt of around £35 million from Barclays and RBS yesterday. Clintons was already in technical default under the loan documentation. On acquiring the debt, AGC then immediately informed Clintons that it intended to enforce the loan. Clintons could not pay the outstanding amount and so has gone into administration.
It all seems to have come as a shock to Clintons. From its slightly breathless RNS today:
“Whilst not party to the negotiations between the Banks and American Greetings, based on its discussions with American Greetings, the Board believed that, if the loan facilities were sold to American Greetings, American Greetings would enter into discussions with the Company with regard to its ongoing support for the business and expected it to extend the waiver of the technical breaches of the loan agreement.”
It didn’t turn out that way.