One of Mission Group’s major shareholders has been advised to reject a bid by competing digital marketing agency Brave Bison, calling the offer “highly unattractive”.
Logistics Development Group (LDG), which is an AIM investing company that owns over 10 per cent of the Mission, was told by its investment manager, DBAY Advisors, not to take any action in response to the approach.
The advice comes days after Mission Group, an AIM-listed marketing agency that works with the likes of Ted Baker and lastminute.com, was the subject of a £27m takeover bid from the owners of Steven Bartlett-founded Social Chain.
The approach from Brave Bison – which is backed by Tory pollster Lord Ashcroft – was rejected out of hand by Mission despite the bid being at a premium of 27 per cent Mission’s share price at the time.
In a statement to markets, DBAY Advisors said: “DBAY believes that the indicative terms of the possible offer undervalue Mission and its prospects.”
It continued: “Whilst DBAY recognises the attraction of cash offers… at significant premia, especially given the limited trading volumes in Mission shares, the all-share offer proposed by Brave Bison is highly unattractive.”
The bid from the acquisitive Brave Bison, which picked up Social Chain February last year for £7.7m, was branded as undervaluing “the contribution of Mission to the proposed combined group”, Mission said in a statement earlier this week.
It added that the bid’s structure would mean Mission shareholders would hold roughly 45 per cent of Brave Bison, and cited that the respective annual earnings of each firm suggest Mission would contribute to over 80 per cent of revenues and over 50 per cent of adjusted pre-tax profit.
It is the latest in a long line of takeover plays that have provoked worries that low valuations on the London Stock Exchange are attracting speculative bids.
Brave Bison now has until 5pm on 9 June to announce whether it plans to make another bid under the UK’s laws on mergers and acquisitions.