Belvoir has indicated that it will pursue a merger with The Property Franchise Group – and will also “pursue other opportunities as they arise”.
The group, in a statement to the London Stock Exchange, said it had arranged, indicatively, a new borrowing facility with a major bank.
The statement also said that its initial ‘possible merger offer’ was not an unsolicited approach, but had been made in response to a willingness to engage in discussions “expressed to the board on more than one occasion by TPFG”.
The statement also said that it would be willing to restructure its initial possible offer, a mixture of cash and shares.
It could reduce the cash element, and increase the number of new Belvoir shares issued per TPFG share, resulting in the latter’s shareholders owning a higher proportion of the enlarged group: “As such, the TPFG shareholders could participate more significantly in the equity of the combined businesses.”
Belvoir also signalled that the board of a new, enlarged group could be composed equally of Belvoir and TPFG directors.
Belvoir said it was “firmly of the view” that this is the right time for industry consolidation.
TPFG has come out strongly against Belvoir’s proposed merger, saying that it is not a merger at all but a hostile takeover.
The latest move by Belvoir does not mean that it has actually made a firm offer.
Under the “put up or shut up” rules of the stock market, it had 28 days from first making its merger proposal to either come up with a firm offer or announce that it will not make an offer.
Those 28 days are up on November 16.
If Belvoir decides against making an offer, it will have to ‘shut up’ for six months.
The ‘put up or shut up’ rules were introduced to prevent long periods of uncertainty which could affect a company’s share prices and trading.
Whether this progresses is ultimately Ian Wilson’s decision – if he sells TPFG he gets to retire with a handsome sum of money. But he will have faith in his ability to oversee a stronger TPFG without Belvoir. TPFG doesn’t need Belvoir – it just depends on if Mr Wilson has had enough of being a CEO. Methinks he hasn’t.
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Methinks he hasn’t either but it would be very uncomfortable for him to stay on in the event Belvoir acquired the sizeable minority held by the market. There must be a reason why Belvoir don’t want his services in an enlarged group and while Richard Martin may regard him highly, I daresay if a Belvoir offer proved juicy enough, he may take a pragmatic view – All’s fair in love and money!
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