System1 rejects bid approaches from major shareholder Brave Bison
System1 Group PLC on Monday said it had rejected two bid proposals from London-based advertising and communications agency Brave Bison Group PLC.
The London-based marketing firm said the first all-share proposal was received on June 8 under which shareholders would have received 3.5988 Brave Bison shares for each System1 share held, around 297 pence per share.
System1 said this "materially undervalued" the firm and its prospects and rejected the proposal.
After further dialogue with Brave Bison, which holds a 28% interest in System1 and is its largest shareholder, a new cash-and-shares proposal was tabled last Friday.
Under this, System1 shareholders would receive 2.7553 Brave Bison shares and 68 pence in cash for each share held, worth 317p per System1 share, or £43.1 million, based on Brave Bison's 90.5p closing share price on Friday.
System1 believes this also "materially undervalues" the firm and unanimously rejected the plan.
Shares in System1 were up 2.6% at 312.98p each in London on Monday. Brave Bison was down 2.7% at 88.10p.
Brave Bison said the cash element of the bid will be fully funded by a credit facility made available on a certain funds basis which is in advanced stages of negotiation. No equity fundraising would be required.
It said an enlarged group would have a "highly desirable" revenue mix, with around 58% of net revenue derived from high-margin, low marginal cost, scalable platform solutions. Sales would be spread across the UK, Europe and US, with over 700 customers and limited customer concentration risk.
"Together, Brave Bison and System1 would have the scale, capital, and strategic backing to accelerate product development, attract and retain world-class talent, and compete aggressively for the growth opportunities that the current AI-driven transformation in marketing technology is creating," Brave Bison said in a statement.
An enlarged group would likely gain inclusion in the AIM 100 Index, increasing its "relevance" to institutional investors and "materially" expanding its potential shareholder base, Brave Bison added.
Brave Bison has until close of business on August 26 to make a firm proposal or walk away.
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