Negotiations over a £41m offer for SIPP and pensions provider STM Group have been extended for a second time.

In July STM agreed in principle to a £41m takeover bid from Guernsey-based investment vehicle PSF Capital GP II Limited, better known as Pension SuperFund Capital.

STM said the boards of the two companies had reached an agreement on a possible 70p a share cash offer for STM shares.

However, the deal has yet to be concluded and negotiations have been extended.

Initially the negotiation deadline was extended from 8 August to 22 August and has now been extended to 5 September.

Further delays have not been ruled out.

In a statement today STM said: "Discussions remain ongoing between Pension SuperFund Capital and STM Group with respective management teams working constructively together on the due diligence process. In order to allow further time for the diligence exercise and discussions to be completed, the board of STM Group has requested that the Panel extend the PUSU Deadline in accordance with Rule 2.6(c) of the Code.

"In the light of this request, a further extension has been granted by the Panel and, in accordance with Rule 2.6(a) of the Code, Pension SuperFund Capital is required, by not later than 5.00pm on 5 September 2023, either to announce a firm intention to make an offer in accordance with Rule 2.7 of the Code or to announce that it does not intend to make an offer, in which case the announcement will be treated as a statement to which Rule 2.8 of the Code applies. This deadline may be further extended with the consent of the Panel, at STM Group's request, in accordance with Rule 2.6(c) of the Code."

Pension SuperFund Capital may be considering an alternative, possibly lower offer for the group, STM said, and a third party may make an offer.

STM added:"There can be no certainty either that any offer will ultimately be made for the company."

STM said it would make a further announcement "when appropriate."

The deal has yet to be formally approved by shareholders of both companies and the regulators.

STM, led by CEO Alan Kentish, owns SIPP firm Options, formerly Carey Pensions, and a number of other cross-border pensions interests.

The board of STM said at the outset that that should a firm offer be made for STM it would be “minded” to recommend it unanimously to STM Group's shareholders.

STM is believed to have received a number of approaches. It owns a number of SIPP and SSAS businesses including Options and has acquired the SIPP and SASS book from Mercer.

In its latest annual financial results published in June CEO Alan Kentish said: "Whilst we have made progress with the underlying business performance as compared to 2021, new business growth has not been at the speed or levels that I would have wanted or expected."

He said new business revenue for STM's pensions businesses, particularly in the UK SIPP market, while "steady", were below previous expectations. 

The STM Group reported revenues of £24.1 million (2021: £22.4 million) in the year with profit before other items and tax of £3.3 million (2021: £2.8 million). The £1.7m increase in revenue was largely due to the acquisition of the Mercer books which contributed £0.8 million of revenue in the year, and revenue growth in its life companies of £1.5 million. 

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