Independent directors at Tangent Communications have responded to the potential rival bid from Writtle Holdings with a holding statement.
Writtle Holdings announced on Friday that it was considering a bid of no less than 2.75p a share, which is higher than the £6.7m bid tabled by members of Tangent’s existing management team two days earlier.
The Writtle offer values Tangent at £7.64m. It also exceeds the £7m loan being made available by Tangent non-executive chairman Michael Green to facilitate the management bid.
This morning, Tangent issued a stock exchange announcement that said: “The independent directors of Tangent note the announcement released on 12 February 2016 of a possible offer for Tangent by Writtle and announce that they are considering the terms and pre-conditions of the possible offer and will make a further announcement in due course.”
The directors also advised Tangent shareholders to take no further action until they make a further announcement.
Although the £6.7m management bid includes irrevocable undertakings from a number of Tangent shareholders encompassing more than 55% of its shares, the undertakings include caveats should a higher bid be tabled.
“Those irrevocables are known as ‘soft irrevocables’ and fall away in the event of a materially higher offer, and 2.75p is higher than the required threshold for them all to fall away,” said a source close to the situation.
Private equity firm Livingbridge EP, which has an 11.3% stake in Tangent, can accept a rival offer provided it is for not less than 2.5p per share.
And investment companies Oryx International Growth Fund (5.4% of the shares) and Hargreave Hale (4.93% holding) can accept an alternative offer that exceeds the first bid by more than 10%, is recommended by the Tangent board, and has been in place for ten days without a revised offer from Bidco (the Michael Green backed bid from members of the management team).
Writtle’s offer is preconditional on gaining the required access to carry out due diligence on Tangent.
This morning chairman Robert Essex told PrintWeek: “We are still awaiting the requested information in order to be able to consider and hopefully confirm a higher offer, which would be at no less than 2.75p.”
Tangent’s share price jumped on the last week’s offer news, but fell by 0.05p, or 1.8%, to 2.45p in early trading today.
PrintWeek was unable to reach Tangent chief executive Tim Green or chief financial officer Jamie Beaumont, who are both also involved in Bidco, or Tangent executive director Kevin Cameron, for comment at the time of writing.