Mission Group has rebuffed a takeover proposal from rival AIM resident and digital advertising company Brave Bison, which acquired Steven Bartlett-founded Social Chain last year.
Mission announced on Monday that it had received an unsolicited proposal from Brave Bison on 29 April. The all-share proposal had an exchange ratio of 11.5 Brave Bison shares for each Mission share, which valued the latter at around 29p per share.
The firm said that after taking financial and legal advice, Mission’s board unanimously rejected the proposal, considering it “opportunistic and significantly undervalues the group and its prospects”.
It added that the bid was “dilutive to Mission’s shareholders as it does not reflect the relevant contributions of each party to the proposed combined group”.
The combined group would boast revenues of around £120m and an adjusted earnings before tax (EBITDA) of roughly £14m, based on the two firm’s latest results.
The move is the latest in a string of takeover attempts that have caused alarm about a potential exodus from the London Stock Exchange’s smaller AIM market.
Mission said Brave Bison’s proposal “undervalues the contribution of Mission to the proposed combined group” as it would result in Mission shareholders holding roughly 45 per cent of the group.
The company noted a 62.1 per cent improvement in its share price since announcing an operational review in October to cut costs after clients reduced ad spend. Its recent results showed losses widened to £10.7m.
It added that based on the latest annual earnings of each firm, Mission would contribute approximately 81 per cent of revenues, 71 per cent of adjusted EBITDA and 54 per cent of adjusted pre-tax profit to the group, which Brave Bison envisaged would have just one non-executive director from Mission on its board.
Mission said its board was “open to proposals that it believes would enhance shareholder value and deliver benefits to Mission’s shareholders”.
Brave Bison now has until 5pm on 9 June to announce a firm intention on whether it will make another bid.
In February 2023, Brave Bison inked a deal to buy Social Chain, the social media advertising and influencer marketing company founded by podcaster Steven Bartlett. Since 2020, Brave Bison has acquired five companies.
Brave Bison’s chief executive Oliver Green said on Monday that a tie-up with Mission “has the potential to deliver compelling value for both company’s shareholders, clients and employees”.