No job losses at RSM Tenon say administrators

THE administrators overseeing the takeover of RSM Tenon by fellow accountancy firm Baker Tilly say the move won’t lead to job losses. 

Debt-laden RSM Tenon appointed joint administrators yesterday who immediately sold its trading companies to rival Baker Tilly in a pre-pack deal. 

The move comes after Lloyds Banking Group informed RSM Tenon that should it, as expected, be in breach of its banking covenants, it would not be willing to grant a covenant waiver.

RSM Tenon asked the London Stock Exchange to suspend its shares early yesterday morning, pending an announcement.

Then in a statement issued at 10am yesterday RSM Tenon said: “Consequently, and in the absence of any other available facilities, the company does not expect to continue to be able to meet its liabilities as they fall due. The board of the company therefore concluded that, in such circumstances, the appointment of administrators was the most appropriate course of action.”

Three insolvency practitioners at Deloitte – Matt Smith, Nick Edwards and Clare Boardman – were appointed as joint administrators to RSM Tenon Group this morning.

Immediately following their appointment, the joint administrators agreed a sale of the company’s trading entities to Baker Tilly.

The sale is expected to complete within two weeks, following regulatory and shareholder approval.

RSM Tenon is the seventh largest accountancy firm in the UK. The group operates out of 35 offices and employs around  2,300 staff. But the administrators say no job losses are expected.

One of them, Matt Smith, said: “We believe the proposed sale to Baker Tilly represents the best outcome for the RSM group. The management of the group have stabilised the business, returning it to profitability over the past 18 months and making this transaction possible to secure its future.

“In the meantime we are working closely with the directors of the trading entities and their management and staff to continue to support the business until the sale is completed.  We appreciate the cooperation and support from the staff, customers, suppliers and landlords during this period.”

RSM Tenon and the other principal trading entities continue to trade as normal.

Baker Tilly has been linked with a takeover of RSM Tenon since the end of July but it announced to the stock market this morning that a deal would not be going through as things stood, leaving the way open for a pre-pack deal once RSM Tenon had entered administration.

Baker Tilly said the transaction allows for the on-going success of RSM Tenon’s profitable trading businesses, free from the burden of the group’s historic debt obligations, as part of an enlarged and financially strong Baker Tilly group. 

“We believe that this is an excellent outcome for RSM Tenon’s clients and employees, allowing for enhanced service excellence and career development opportunities,” it said.

“Although the parent company of the RSM Tenon group is now in administration, we have acquired the profitable trading subsidiaries as going concerns. 

“They will continue to operate as normal providing high quality audit, accounting and other professional services to their many valued clients in both the public and private sectors around the UK and internationally.

Laurence Longe, Baker Tilly’s managing partner, said: “Baker Tilly and RSM Tenon are businesses of a comparable scale operating in similar markets across the UK and internationally, and so combining our strengths and skills will provide us with new opportunities for growth, as well as further strengthening and expanding our offering to the market.”

Financial backing for the acquisition was provided by Lloyds TSB Bank.

Both Baker Tilly and RSM Tenon have operations in central Birmingham.