16th Aug 2021 12:19
(Alliance News) - Science Group PLC on Monday said it is unlikely to buy TP Group while its board refuses to cooperate, but held out the prospect of a future deal as it called for a general meeting to replace two directors.
TP Group shares were down 5.7% to 5.00 pence in London on Monday. Science Group was up 2.7% to 457.95 pence.
Cambridge-based Science Group provides research and regulatory consultancy services, as well as developing chips and software for digital radios. TP Group is a software consultant based in Reading.
Last Tuesday, Science Group revealed it had bought a 10% stake in TP Group and sought to engage with the board over a possible strategic investment or a takeover, but its approaches had been rebuffed.
Since then, Science Group made a possible offer at a "significant premium" to TP Group's unaffected share price of 3.9p and requested access to due diligence information. TP Group rejected the approach. Science Group did not disclose the exact price.
"The obstructive approach of the TP Group board is indefensible. On July 28, 2017, TP Group completed a GBP20.8 million fund raising at 6.5 pence per share. On August 6, 2021, the last trading day prior to Science Group's share purchase, the closing mid-market share price of TP Group was 3.9 pence," Science Group said.
"All of the current directors of TP Group PLC, except the new CEO, were appointed prior to the July 2017 fundraising and have therefore presided over the value deterioration over the past four years."
Science Group added that it has not withdrawn its interest in potentially making an offer, but it is unlikely to be able to without the board's cooperation because of TP Group's uncertain financial position.
Furthermore, Science Group said it will maintain its 10% stake as a strategic investment and will not consider any offers for it, the company said.
Science Group has requested a general meeting of TP Group shareholders to vote to replace two of its directors with its own candidates.
Chair Andrew McCree and Non-Executive Director Jeremy Warner-Allen would be up for removal from the TP Group board, with Science Group Chair Martyn Ratcliffe and Non-Executive Director Peter Bertram proposed as replacements.
By Ivan Edwards; [email protected]
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