Listed law firm Knights has agreed to pay cash rather than shares to complete an acquisition after a week in which its share price collapsed.

The national firm announced in January that it had agreed to buy York practice Langleys Solicitors LLP for £11.5m. The terms included an initial £5.25m in cash and transfer of 704,515 shares then worth £2.75m.

When the acquisition was announced, Knights shares were trading at 394p. By the end of last week they had dropped to 150p, prompting a rethink over the details of the Langleys deal. The firm announced on Friday that ‘following the group’s recent share price movements, Knights has adjusted the terms of the acquisition’.

The £2.75m that would have been issued in shares will instead be paid in cash in three equal instalments over the next three years.

Knights shares recovered slightly to 158p today after a week in which the market responded unfavourably to a trading update stating that profits for 2021/22 are likely to be lower than previously predicted.

The company said that the effects of Covid-19 on people returning to work at the start of this year had hit the business and affected its team-based culture. There had also been a ‘softening in business confidence’ due to concerns around the strength of the economy and a slowdown in corporate work. Chief executive David Beech said recent events had been ‘frustrating’ and held the business back from delivering a stronger performance in the second half of this financial year.

A further update on the year ending 30 April will be provided in May.

 

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