Blue Oar’s management says it still does not intend to recommend Evolve Capital’s bid even though the bidder has acceptances of more than 50%.
The bid has gone unconditional and Evolve was reintroduced to Aim on 31 December following the reverse takeover. However, Blue Oar’s management points out that Evolve needs 75% of the shares to cancel Blue Oar’s Aim quotation.
The Blue Oar board owns just over 10% of the company and Andrew Monk, Mark Brumby and Peter Joy own the majority of them. The three men want to lead a management buy out of Aim adviser Blue Oar Securities. That would leave Evolve with the private client and asset management operations that it wants. It is unclear whether it includes the Australian subsidiary, Inteq Ltd, although it does not appear to.
Evolve says that it would accept the shares of the directors and other members of the management team as part of the consideration for a management buy out.
Chairman Gavin Casey is stepping down and plans to sell his 2.25m shares in the market. Evolve has some cash but it can’t afford to buy many shares in the market. It needs to swap its own shares for them. Blue Oar does have cash.
Evolve wants to make a number of appointments to the Blue Oar board. Some of these proposed new directors are classed as independent of Evolve and will take the lead in assessing any buy out offer.
There could be other bids for Blue Oar Securities. WH Ireland may still be interested. Evolve may even decide not to sell. Evolve is realistic enough to know that it needs to keep the employees happy or they will leave.
Shares in Evolve fell 0.5p to 8.5p each following the reverse takeover. Shares in Blue Oar fell 0.5p to 9p each.
The Evolve bid is 1,025 of its own shares for every 1,000 Blue Oar shares. Assuming full acceptance Evolve will end up five times it current size and valued at around £20m. The offer remains open until 13 January.
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