20th May 2019 10:11
LONDON (Alliance News) - Shares in Frontier Smart Technologies Group Ltd spiked on Monday as the audio and smart home software systems producer said it failed to reach an agreement with Science Group PLC in respect of a takeover offer for Frontier.
Frontier shares were trading up 73% at 25.56 pence each following the news. Fellow AIM-listed stock Science Group was up 1.3% at 205.70p.
At the beginning of May, Frontier received a proposal from Science Group for a possible takeover offer at 30 pence per share.
"Discussions with Science Group continued but agreement to the proposal was unable to be reached as the board considered a number of the conditions to be potentially prejudicial to shareholders' interests," Frontier explained.
It added: "The board considers the protection of shareholders to be of utmost importance and so undertook, while bearing in mind shareholders' best interests, to adhere to the general principles of the Takeover Code in respect of the possible offer insofar as it was able, or was reasonably practicable, so to do."
Frontier said it "remains focussed on its strategy" and reconfirmed expectations to report sales of approximately USD36.6 million.
Furthermore, Frontier added that between May 9 and 17, Science Group acquired 3.7 million shares, or 9.0% of the company's capital.
Science Group, a science and technology consultancy, separately noted that the average price paid for the shares was 12.50 pence for a total investment of GBP460,691.
Science Group commented: "Subsequent to receipt of the proposal, the Frontier board has sought to selectively apply the principles of the Code, to which Frontier's own website and listing admission document state that it is not subject. The board of Science Group considers this arbitrary action by the Frontier board to be a conscious attempt to obstruct the proposal."
It added: "As a result, in the absence of substantive progress on the detail of the proposal and the lack of formal response to Science Group's most recent correspondence, Science Group has notified the Frontier board that it has withdrawn its proposal."
"Science Group considers that there are significant potential synergies with Frontier and that a combination would be in the best interests of Frontier's employees, customers and shareholders. Science Group has a strong, asset-backed balance sheet, with significant cash resources and an experienced management team which has delivered value to shareholders," the company concluded.
Related Shares:
Science GroupFST.L