10th Aug 2021 12:42
(Alliance News) - TP Group PLC on Tuesday said it has received an approach regarding either a merger with, or further investment from, Science Group PLC, which now holds a 10% stake in the company.
Science Group said in a separate announcement on Tuesday that it wrote to TP Group on Monday to encourage the company to consider accepting a strategic investment or potential merger.
Hampshire, England-based TP Group is a consulting, software and engineering company serving the defence, energy and space markets. Science Group is an international, science-led services and product development organisation based in Cambridge, England.
Shares in TP Group were trading up 34% at 5.22 pence, whilst Science Group was trading 0.9% higher at 449.00p each in London on Tuesday afternoon, after the approach was announced.
Earlier Tuesday, Science Group purchased 79.3 million TP Group shares - or 10% of the company's issued share capital - on the open market.
The Cambridge-based company added that: "TP Group operates primarily in the Defence and Aerospace sectors which would be complementary to Science Group's activities, with minimal overlap."
TP Group said the talks were preliminary, whilst both companies noted that there was no certainty that an offer would be made.
Science Group said its previous outreach attempts were all rejected, despite the "very evident" challenges TP Group faces.
According to Science Group, these challenges are indicated by the recent replacement of TP Group's chief executive and a track record of "poor" shareholder returns.
TP Group's 2020 results even raised concerns about its ability to continue as a going concern, Science Group added.
For contrast, Science Group emphasised its own strong performance.
The product developer said its interim results for the six months ended June 30, noted revenue of GBP40.7 million for an adjusted operating profit of GBP7.3 million, plus a 50% increase in adjusted earnings per share compared to the previous year.
By Scarlett Butler; [email protected]
Copyright 2021 Alliance News Limited. All Rights Reserved.
Related Shares:
Science GroupTPG.L