22 Aug 2013 08:33am

Baker Tilly rules out full offer for RSM Tenon

Baker Tilly has announced that it is not to make an offer for mid-tier firm RSM Tenon

In a stock market announcement this morning, Baker Tilly said it did "not intend to make an offer for the entire issued share capital RSM Tenon."

However, Baker Tilly did not rule out making an offer for part of its listed rival, saying, "Baker Tilly remains of the view that there is significant value in the RSM Tenon group and continues to be interested in an alternative potential transaction involving an acquisition of part or all of the business of the RSM Tenon group."

Shares in RSM Tenon have also been temporarily suspended from trading this morning by the Financial Conduct Authority. The FCA said shares were suspended "at the request of the company pending an announcement."

At the end of July, it was announced that Baker Tilly had made an approach to RSM Tenon and the two firms were in talks over a possible merger.

Since then, RSM Tenon shares have plummeted. The firm's market cap dropped to £7.26m on the day that Baker Tilly announced its interest and has steadily declined to its current market cap of £3.71m.

Shares dropped more than 50% in one day alone, after Baker Tilly announced it would attach “minimal value, if any” to the firm's share capital earlier this month, due to RSM Tenon's ligh levels of debt.

According to published figures a tie-up between the two could have created a firm with annual revenues of around £378m, 63 UK offices and around 3,000 professional staff, statistics that would move it up the rankings to become the sixth largest accountancy business in the country.

Our analysis looks at which parts of RSM Tenon might prove attractive to Baker Tilly.

Helen Roxburgh


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