Brave Bison has raised its hostile offer for System1 Group for a fourth time, to 135p in cash plus 2.394 new Brave Bison shares, an implied 360p that values the AIM-listed research firm at about £47.5m — up from the £43.1m third offer System1's board rejected last month.
Brave Bison, the digital media group that owns SocialChain, is already System1's largest shareholder. It built a 27.85% stake in a strategic purchase in February and has been pursuing the rest of the company since June, moving from two non-binding proposals to a firm Rule 2.7 offer in July.
System1's board has unanimously rejected every approach, arguing the terms undervalue the business and criticising Brave Bison for arriving without irrevocable shareholder support. The company is advised by Canaccord Genuity.
The fourth offer is a 10% increase on the implied 327p of the third offer, tabled on 30 July, and an 82% premium to System1's undisturbed 198p price in February, before Brave Bison began building its position. The implied figure is calculated on Brave Bison's 20-day volume-weighted average price of 94p as at 10 July.
That calculation matters to anyone reading the cap table. More than half the consideration is Brave Bison paper, so the cash-equivalent value System1 holders would actually receive moves with the bidder's own share price, which has been volatile since June. Brave Bison closed Friday unchanged at 86p — below the 94p used in the implied valuation. System1 closed at 330p, down 2.4% on the session and below the new offer level.
Brave Bison has now disclosed non-binding letters of intent covering 38.9% of System1's shares, a figure that includes its own holding and support from former System1 chief executive Stefan Barden and his family. The offer remains conditional on acceptances from more than half of the voting rights Brave Bison does not already control. The bidder has said that reaching 75% would trigger a delisting from AIM and a move to take System1 private.
The complication sits on the acquirer's side of the register rather than the target's. Lord Michael Ashcroft, who owns 23% of Brave Bison, provided written support to System1 in its defence against the takeover last week. Whether he backs the improved fourth offer has not been disclosed.
System1's board had not issued a public response to the latest increase at the time of writing.
Original source: BusinessCloud — https://businesscloud.co.uk/news/brave-bison-ups-system1-offer-despite-opposition-from-its-biggest-shareholder/
