A management buy out team is offering 2.25p a share for printer Tangent Communications.
The 2.25p a share bid values Tangent at £6.69m and it is 64% higher than the previous closing price. This bid is pitched at 16 time prospective earnings, while leaving Aim will reduce costs. There was net cash of £1.5m at the end of August 2015.
The bid is well below the net asset value of £31.6m at the end of August 2015. Even if you take the view that management has overpaid for its businesses then the NAV excluding goodwill is £6.79m. Tangent is profitable but the profit has been declining.
The bid vehicle is owned by Portland, which is wholly-owned by non-executive chairman Michael Green, who should be able to afford to finance the offer. The directors of the bid vehicle are Jamie Beaumont, Nicholas Green and Timothy Green, who are executive directors of Tangent.
The share price was 5.88p a year ago and more than 11p less than two years ago.
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