A significant shareholder in pawnbroker Ramsdens has announced its intention to oppose a £206 million takeover bid from US-based rival FirstCash. Fund manager Downing, holding a 6.8% stake and ranking as the third-largest investor in the AIM-listed company, criticized the offer for substantially undervaluing Ramsdens.

FirstCash made a formal proposal to acquire Ramsdens at 609 pence per share, a bid the target company publicly recommended earlier this week. Despite this endorsement, Downing argued that the valuation does not adequately reflect Ramsdens' business prospects and underlying value.

The disagreement highlights differing perspectives on the company’s worth amid the ongoing acquisition process. Ramsdens has maintained that the offer price provides fair value to its shareholders and presents a compelling opportunity for investors.

Details surrounding the timeline for shareholder voting on the proposed deal have not been disclosed, but the opposition from a major stakeholder such as Downing could complicate the path forward. The outcome of the takeover will depend on whether other shareholders align with Ramsdens’ board or echo Downing’s concerns over valuation.

This acquisition attempt forms part of FirstCash’s broader strategy to expand its footprint in the UK pawnbroking market. The company is known for its focus on buying comparable businesses to strengthen its position globally.

As the situation develops, further statements from involved parties and shareholder feedback will be closely monitored to gauge the likelihood of the bid's success or failure.