£31m deal collapses amid accusations of abusive and threatening behaviour
A deal to acquire a Wiltshire steel company has collapsed amid claims of abusive and threatening behaviour.
The £31m deal to buy the Malmesbury based Megasteel had been agreed by M&A specialist More Acquisitions.
But following an announcement on the stock market regarding the deal the board of the Wiltshire firm were subjected to a tirade of abuse and vitriol.
As a result of the campaign by people claiming to be More shareholders the Megasteel board took the decision to pull the plug on the deal.
More Acquisitions has since published details of the hate campaign in a statement to the Stock Market.
Revised terms of the proposed acquisition were published this week and the board of Megasteel were holding detailed conversations with More stakeholders.
Following the discussion both the More and Megasteel Boards agreed to press ahead with the deal which would have taken place in the autumn.
The statement to the Stock Market revealed unsolicited and unprecedented actions by “individuals other than the shareholders directly contacted by the company” made it impossible to move the deal forward.
The statement said: “In particular, it has become apparent that parties claiming to be shareholders in More have approached Megasteel’s management and owners directly in recent days and engaged in abusive and threatening behaviour which has, understandably, been viewed as totally unacceptable by the owners of Megasteel.
“As reiterated in earlier announcements by More, Megasteel is a cash flow positive, profitable, business, with a year-end cash position of over £10m. There is, and will remain, no financial or operational imperative for Megasteel to seek a stock market listing.
“It is therefore completely understandable, if entirely regrettable, that, faced with an unwarranted tirade of abuse and vitriol directly addressed at them, the board and owners of Megasteel yesterday afternoon formally informed the company that it was withdrawing from the acquisition.”
The statement added: “The directors believe that termination of the acquisition at this very late stage, after over eight months of successful due diligence, is not only deeply disappointing but was also entirely avoidable. But for the completely unacceptable and profoundly offensive actions of certain individuals, all More shareholders would shortly have had a chance to individually decide whether or not to approve the Acquisition.
“It is self-evident that shareholders in More have the right to make their views known to the company and its professional advisers, a right which observers will be aware has been properly and legitimately publicly exercised by a number of company stakeholders in recent days. However, aggressive, abusive and threatening behaviour, targeted directly at Megasteel’s owners and managers, is totally unacceptable.”
Rod McIllree, executive director of More Acquisitions, said: “The termination of the proposed Megasteel deal represents a massive, wasted opportunity; not only for More shareholders, who have now been deprived of their right to decide on the acquisition, and potentially benefit from it, but also for the wider London stock market. The More board understands and empathises with Megasteel’s owners, whose first direct ‘interaction’ with individuals purporting to be UK small cap investors has proved to be such a distasteful and unpleasant experience.
“The company will now restart its review process with a view to identifying other suitable acquisition opportunities for More.”
Megasteel was established in 1991, initially specialising in steel for the reinforced concrete. Since then, it has become the largest distributor of wire and steel for the prestressing and post tensioning of concrete in the UK.
