14th Jun 2019 14:42
(Alliance News) - Science Group PLC on Friday said it will not accept any takeover offer for investee Frontier Smart Technologies Group Ltd, and urged it to continue talks over a combination between the two.
Frontier earlier Friday said a "credible industry player" has made an initial approach for the company, though stressed there is no certainty of an offer.
Science Group is a 28% shareholder in Frontier, and in mid-May failed to agree an offer of its own for Frontier, which would have seen Science Group make a 30 pence per share bid for Frontier's shares it does not own.
Frontier shares were up 7.8% on Friday afternoon at 34.00 pence each, with Science Group up 0.8% at 200.50p.
Frontier did not identify the prospective bidder, and Science Group has said in a second statement Friday: "Science Group does not intend to sell its shares to any other potential bidder or vote in favour of any alternative transaction, including any vote on the disposal of assets of Frontier.
"In particular, Science Group notes it will not be possible for another bidder to implement the transaction as a statutory merger or scheme of arrangement without the cooperation of Science Group, since each of these transactions would require the approval of at least 75% of Frontier shareholders voting."
Science Group also warned against a "protracted process, taking into account the financial position of Frontier". Frontier guided in May for a loss before interest, tax, depreciation, and amortisation loss of USD2.2 million for the first half of 2019.
"As a result, Science Group reiterates the uncertainty regarding the deliverability of the second approach, as well as the potential risks to Frontier from further delay. Therefore, Science Group again encourages the board of directors of Frontier to engage with Science Group to complete a transaction with Science Group in a timely manner," added Science Group.
Science Group also said in its earlier statement on Friday its adviser, Panmure Gordon UK Ltd, has told it that Frontier's advisor N+1 Singer disclosed inside information to Panmure about Frontier, something which Panmure had not requested.
Science Group said it declined this information, and has not received it. It believes Frontier should make the information public to the market, and has told Frontier this, but did not receive a reply.
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