Brave Bison sweetens final System1 bid to GBP53.4 million

Brave Bison Group PLC on Wednesday sweetened its takeover bid for System1 Group PLC for a fifth and final time, valuing the advertising and communications agency at £53.4 million and adding a contingent cash payment.

Brave Bison said its final offer would give System1 shareholders 180 pence in cash, 2.394 new Brave Bison shares and one contingent value right for each System1 share.

System1 shares jumped 6.5% to 362.00 pence in London on Wednesday morning for a total market capitalisation of £45.8 million, while Brave Bison rose 0.6% to 75.97p for a market cap of £88.1 million.

Based on Brave Bison's 20-day volume-weighted average closing share price of 94p on July 10, the day before the start of the offer period, the cash-and-share element values each System1 share at 405p.

This represents a 13% increase from Brave Bison's fourth offer, announced in September, which comprised 135p in cash and 2.394 new Brave Bison shares and valued each System1 share at 360p.

The latest offer also represents a 105% premium to System1's undisturbed closing price of 198p on February 27, immediately before Brave Bison announced its strategic investment in the company.

Brave Bison said the offer values System1's entire issued and expected-to-be-issued share capital at £53.4 million, excluding the contingent value right. It is equivalent to 10.7 times System1's forecast adjusted pretax profit of £5.0 million for financial 2027.

The newly introduced contingent value right, or Bison CVR, could provide a further 20p in cash per System1 share.

The payment would be triggered if Brave Bison's volume-weighted average share price is 94p or lower during the 60 trading days following publication of its financial 2027 results, which are expected in April 2028.

If the average share price exceeds 94p over that period, the CVR will have no value. Brave Bison said System1 shareholders would remain entitled to any CVR payment even if they had sold the Brave Bison shares received under the takeover offer.

At a Brave Bison share price of 94p, the total implied value of the consideration could reach 425p per System1 share if the CVR becomes payable.

Executive Chair Oliver Green said: "Today we make our fifth and final offer to acquire System1. This final offer includes a 13% increase to the prior offer, with the incremental value paid entirely in cash."

He added: "Having listened to shareholders, we have designed an instrument – the Bison CVR – that provides System1 shareholders with price protection on their Brave Bison shares."

Brave Bison said it either owns or has received irrevocable undertakings or letters of intent to accept the final offer in respect of 39.67% of System1's issued share capital.

Brave Bison itself owns 3.5 million System1 shares, representing around 27.85% of the company.

If the final offer is accepted in full, System1 shareholders would own around 16.6% of Brave Bison's issued ordinary share capital following completion.

Green said the strategic rationale for combining the businesses remained "clear", arguing System1's database linking advertising characteristics with emotional responses and commercial results could play a greater role as advertisers increasingly adopt artificial intelligence-driven marketing systems.

"Under Brave Bison's ownership, System1 would evolve from a research platform into the creative intelligence layer inside global advertisers' AI marketing systems, predicting how people will feel each time those systems create, edit or approve marketing activity," Green said.

Brave Bison said the financial terms are final and will not be increased, except in limited circumstances including the emergence of a competing bidder.

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