Writtle Tangent bid confirmed

Richard Stuart-Turner
Monday, February 29, 2016

Writtle Holdings has confirmed its 3p-a-share offer for Tangent Communications in a regulatory announcement this morning (29 February).

Writtle’s offer is a 33.3% premium on the offer that was made for AIM-listed Tangent by members of its existing management team on 10 February via their ‘Bidco’ vehicle Tangent Holdings UK.

The Writtle offer values Tangent at more than £8.7m. Independent directors of Tangent have responded this morning by confirming that they have withdrawn their recommendation of the Bidco offer and intend to unanimously recommend the Writtle offer.

Writtle said it believes there is a good strategic fit with Tangent and it intends to increase the range of its marketing services business by acquiring Tangent.

It said this would add scale to the Writtle group and accelerate the growth of both Writtle and Tangent.

Writtle Holdings chairman Robert Essex told PrintWeek: “I hope the offer gets the attention it deserves. We had to act extremely quickly and have had to prove we've got the cash. We have gone through every hoop you could think of.”

Essex does not know whether Bidco is likely to respond by increasing its own offer.

“That would be a fair fight if they want to increase their offer, and we’re prepared for that,” he said.

Writtle said that given the level of irrevocable undertakings from Tangent shareholders in support of the Bidco offer, and on the basis that certain of those undertakings will not lapse as a result of the offer, it has set the acceptance condition for the offer at no less than 50% of the voting rights attaching to the Tangent shares.

“We would hope to be able to achieve this but we're aware that Bidco has quite a large proportion of the shares already spoken to, which is why we lowered our acceptance,” said Essex.

“Normally with a bid like this we’d say we want 75% acceptances but we realise we’re not going to get 75% so we’ve lowered our threshold to 50.1%.”

Essex said Writtle has not yet considered whether or not it would maintain Tangent’s AMC listing and reverse Writtle into it so that Writtle becomes an AIM-listed PLC. Writtle would need 75% acceptances to be able to delist Tangent.

In the offer document Writtle said it has not yet come to a conclusion in respect of the continued employment of the directors of Tangent but would expect to nominate new directors to the board of Tangent if the offer becomes, or is declared, unconditional in all respects.

The firm also said it expects the current management and employees of Tangent to play an important role in the ongoing development of the business and has no current intention to make any changes to the firm’s staffing levels.

Writtle’s offer could spark a bidding war for £26.25m-turnover Tangent, which employs around 300 staff in London, Cramlington and Cheltenham.

PrintWeek could not reach Bidco for comment at the time of writing and it is not yet known whether Bidco, which is backed with a £7m loan from Tangent chairman Michael Green, will respond by increasing its offer.

Tangent’s share price was up 16% at 2.75p at the time of writing.

Writtle Holdings has turnover of £83m and owns a portfolio of print, pre-media and marketing businesses including Magnet Harlequin, Creo Retail Marketing, Arken Pop, and Technik.

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