4th Mar 2020 11:28
(Alliance News) - Proactis Holdings PLC on Wednesday said it has ended its formal sale process having received no firm proposals and with no likelihood of an offer its board would recommend.
Shares in Proactis were down 30% at 33.00 pence in London in late morning trading.
Proactis put up the for sale sign in July 2019 in order "to explore a number of approaches and expressions of interest" and began assessing the credibility of potential buyers.
The spend management firm said the sale process did not lead "to any firm proposals being received" and deemed it "unlikely" a prolonged process would "deliver a proposal that the board would be willing to recommend to shareholders".
Given this, the formal sale process is now over - Proactis not wanting the "distraction" and also wishing to focus on its prospects.
Proactis reported on February 20 that the total contract value of new business sold for the six months ended January 31 rose 44% and this rate of new business continued in February with the total signed contact value at around GBP9.4 million for the seven months to February 29.
The company acknowledged that ending the sales process would not achieve the outcome preferred by "some shareholders".
Going forward, Proactis has pledged to transition in the next 12 months to at least half its board, excluding the chair, being independent non-executive directors. This is in accordance with UK governance code.
Moreover, the company will also make amendments to its articles of association so as to require the annual re-election of all of its directors.
Finally, Proactis will review its "reporting key performance indicators" with the goal of increasing "transparency and granularity" on the path back toward growth.
Chief Executive Tim Sykes said: "We believe we have come to the right conclusion for our shareholders as a whole, considering the clear progress that has been made in the business and the opportunities that we have ahead of us.
"The business strategy that we have established is being implemented and is delivering encouraging early indicators. As communicated within our recent trading update, we have delivered a significant improvement in new business and dramatically improved retention rates and we expect a return to revenue growth in the second half of this financial year. Our progress in the short-term has been encouraging and we are confident that the long-term prospects are significant."
By Anna Farley; [email protected]
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