High level of debt makes RSM Tenon effectively worthless
ACCOUNTANCY firm RSM Tenon’s high level of debt means that any takeover of the business by rival Baker Tilly is unlikely to involve a financial settlement.
In an update on the takeover discussions issued to the London Stock Exchange this morning, RSM Tenon said “discussions with Baker Tilly UK Holdings Limited are continuing. However, it is now likely that, as a consequence of the company’s high debt level, if an offer is made by Baker Tilly, minimal value, if any, will be attributed to the issued share capital of the company.”
The statement went on to say that Lloyds Banking Group continues to be supportive of the business as the company discusses with it ways to address its high level of borrowings.
RSM Tenon said the announcement was made with the agreement and approval of Baker Tilly.
RSM Tenon issued a stock market statement saying it was in discussions with Baker Tilly, “which may or may not lead to an offer being made for the entire issued share capital of the company”.
Last year RSM Tenon posted a pre-tax loss of £101m, largely due to exceptional items of £77m. In April it said debt stood at £80m.
The business now employs some 2,600 people.
Under the Takeover Code Baker Tilly has until next Thursday (August 22) to make an offer.
