Jersey-based fund manager TEAM plc approached the board of Tavistock on 11 March about making an all-share offer for the company.

Tavistock rebuffed the offer almost immediately and has made a further statement Stock Exchange today criticising the approach.

The Tavistock board said the TEAM offer - one TEAM share for every 45 Tavistock shares - provided a “zero per cent premium to the prevailing Tavistock share price.”

After considering the proposed offer, Tavistock says it unequivocally rejects the proposed offer for the following reasons:

• Valuation: the offer continues to “significantly undervalue” the business. The board believes that the true value of the company is several times higher than its current market capitalisation.
• Strategic rationale: The board does not believe there to be any “commercial logic or sufficient operational synergies” that would justify a combination of the two businesses.
• Shareholder value: The board does not consider that a paper-only offer made using illiquid shares, that would represent over 50% of the offeror's then enlarged issued share capital, is “credible or warrants further consideration.”

The board has advised shareholders to take no action at present. 

Tavistock has pointed out in its statement that TEAM is a recently-established public company that was admitted to trading on AIM less than one month ago with a “negligible track record” of successfully acquiring and integrating businesses.

TEAM has approximately 16.56m shares in issue, very few of which have been traded since it joined AIM, Tavistock says. As a result, Tavistock called the TEAM shares largely “illiquid.”

TEAM has until 20 April to either announce a firm intention to make an offer or announce that it does not intend to make an offer.

TEAM has previously said that it believes that Tavistock shareholders “deserve the opportunity to decide on the merits of any offer.”