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Money News

Britain's Amigo shares climb over 30% as founder calls for takeover

LONDON (Reuters) - Shares of Britain’s Amigo Holdings rose more than 30% on Friday after its founder and former Chief Executive James Benamor, who has been embroiled in a bitter spat with the lender, called on private investors to back his reinstatement.

Benamor in a tweet published late on Thursday said he had made an irrevocable bid for 29% of the company at 20 pence per share, to be executed if he is appointed as chief executive.

Benamor had stepped back from running Amigo after it listed in 2018, but has been embroiled in a public row with the company’s management over strategy since late last year.

The lender, which provides loans to borrowers who struggle to obtain credit from mainstream lenders if a friend or family member can act as a guarantor for them, on Friday reported a more than 80% drop in profit in the first quarter.

Amigo is being investigated by Britain’s Financial Conduct Authority over how it assesses the creditworthiness of customers, and has stopped almost all lending amid the coronavirus pandemic and the probe.

Benamor called for a shareholder vote to oust current Chief Financial Officer Nayan Kisnadwala and board member Roger Lovering, as well as to reinstate himself as CEO.

The firm said it could not provide guidance on its expected performance this year, and reiterated that the impact of the pandemic and the FCA investigation meant there is uncertainty over its ability to continue as a going concern.

Analysts said Benamor’s commitment to buy at 20 pence per share was behind the rise in the embattled lender’s stock, which rose to near 16 pence from its 12 pence close on Thursday. It was at 13.8 pence by 0735 GMT.

Reporting by Lawrence White; editing by Jason Neely, Kirsten Donovan

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