UK wealth firm Tavistock Investments has said that the M&A proposal by Jersey-based fund manager Team was “opportunistic” and an “unwelcome distraction” in its year-end trading update.
The bid was not positively received by Tavistock, which rejected it straight away. But Team’s offer is now backed by 14% of Tavistock shareholders, however the wealth firm seems to have other plans in store.
It said in the trading update: “The opportunistic approach made to the company by Team, a newly listed Aim company supported by a small grouping of former employees and disaffected shareholders, has been an unwelcome distraction for the company.
“Team has announced that it is considering a potential bid for the company at a price that the board believes to be significantly below the value of the company’s assets, as highlighted by the recent transaction multiples set out above and offering only illiquid shares as the consideration.
“By contrast, the board has been exploring ways in which the inherent value of the company’s assets can be used to fund the company’s further development and to deliver significant value for shareholders.”
Results
Tavistock is effectively in an ‘offer period’ which, according to the City Code on Takeovers and Mergers, means it is not allowed to release much information.
Its funds under management as of 31 March 2021 have remained steady compared to the previous year at £1.1bn ($1.5bn, €1.3bn).
During the year, the company took advantage of the UK government’s furlough scheme as well as receiving a loan of £2.1m.
“This was a precautionary measure and whilst funds were received upon approval of the loan, they have remained unutilised. The company plans to repay the loan as soon as circumstances properly permit,” Tavistock said.
