A tender that drew far more shares than it could take

NIOX Group, the AIM-listed maker of point-of-care devices that measure exhaled nitric oxide to help diagnose and manage asthma and COPD, has completed a £12.5 million return of Capital through a tender offer. (LSE:NIOX) The result, announced on 22 October 2026, showed Demand well beyond the amount on offer.

The company offered to buy up to 15,625,000 shares at 80p each, roughly 3.7% of its share capital. (LSE:NIOX) Shareholders validly tendered 215,151,513 shares, equal to 51.1% of the shares in issue at 29 September. On our calculation, that is close to 14 times the maximum, so excess tenders above each holder's basic entitlement were scaled back pro rata. Settlement through CREST was expected by 27 October and cheques for certificated holders by 3 November 2026.

How the offer was structured

Announced alongside the interim results on 29 September, the tender was priced at a 22.0% premium to the 65.6p closing price on the latest practicable date and a 26.9% premium to the three-month volume-weighted average of 63.1p. (LSE:NIOX) Each qualifying Shareholder could sell about 3.7% of their holding as a basic entitlement, with the option to sell more if others did not take up theirs.

Singer Capital Markets bought the shares as principal and sold them back to the company, which cancels them. (LSE:NIOX) After the tender NIOX has 405,241,313 shares in issue. The enabling resolution went to a general meeting on 21 October, and the purchase then proceeded. The directors tendered their basic entitlements, as did Harwood Capital, a substantial shareholder; the independent directors, after consulting the nominated adviser, judged Harwood's participation fair and reasonable under AIM Rule 13.

Why the board chose this route

The board said a tender was the quickest and most efficient way to return surplus cash, open to all holders regardless of size and free of dealing charges, and that cancelling shares should lift Earnings Per Share if earnings are unchanged. NIOX has a stated medium-term intention to return 80% of free Cash Flow to shareholders through Ordinary Dividends and additional returns.

The heavy oversubscription suggests, on our reading, that a large part of the register was willing to sell at 80p. The LSE delayed price for the 3 November 2026 session, was 64.4p, which on our calculation is about 20% below the tender price.

What it does to the balance sheet

The circular gave cash of about £17.4 million and no Debt at 31 August 2026. Interim cash was £16.8 million at 30 June, after a £6.5 million dividend paid in June. Deducting the £12.5 million tender from the August figure leaves roughly £4.9 million, our simple calculation before any cash generated since. First-half Revenue was £24.0 million and adjusted EBITDA £8.3 million, while cash generated from operations fell to £3.9 million as the company built inventory of its new NIOX PRO device.

Share scheme allotments partly offset the reduction in share count. A block listing return on 22 October showed about 2.8 million shares issued under performance and savings plans between April and September 2026, on our addition of the scheme figures.

Risks and constraints

A thinner cash cushion leaves less room for error if the device rollout or ordering patterns disappoint, and NIOX's first half was below an exceptionally strong prior-year period. Further returns depend on free cash flow. The board has said it will consider a buyback only if additional excess cash arises.

What comes next

The board said it will keep assessing capital returns through the rest of the current financial year and into 2027, alongside the group's capital needs. No date for the next trading update was given in the announcements reviewed. On our reading, the full-year results will show how much cash the Business generated after the tender.