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Baker Tilly would pay ‘minimal’ fee for RSM Tenon

Professional services firm RSM Tenon has confirmed its shares will have a minimal value in the event of an offer of acquisition from Baker Tilly because of the level of debt within the business.

RSM Tenon announced in July it was in talks to be acquired by Baker Tilly after Baker Tilly made an “unsolicited” approach for the business.

The firm’s share price then fell 34 per cent to 2.25p and has since fallen to 1.4p.

An RSM Tenon statement says: “Discussions with Baker Tilly UK Holdings Limited are continuing.  However, it is now likely that, as a consequence of the company’s high debt level, if an offer is made by Baker Tilly, minimal value, if any, will be attributed to the issued share capital of the company.

“Lloyds Banking Group plc continues to be supportive of the business as the company discusses with it ways to address its high level of borrowings.”

RSM Tenon made a pre-tax loss of £7.5m for the six months to 31 December, compared to an £83m loss in the same period in 2011.

The accounts said at the time the company was involved in a dispute with its professional indemnity insurers over a £4.3m FSA settlement dating back to 2010 for missold Lehman-backed structured products and unsuitable pension switching advice.

The firm’s huge losses in 2011 were largely due to exceptional items relating to a £63.7m goodwill writedown and the FSA settlement costs.

Dentons Pension Management bought RSM Tenon’s Sipp arm, Tenon Pension Trustees, for an undisclosed sum in March.

In December, RSM Tenon dropped PricewaterhouseCoopers as its auditor following a long-running battle about the quality of PwC’s auditing.

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Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. Funny thing is, that RSM give advice to people on this sort of situation!

  2. Why would Baker Tilly, even for virtually nothing, want to take on a business burdened by crushing levels of over-regulation and debts so great that RSMT is on the brink of going under? (Do we know the quantum of these debts?) Does Baker Tilly think it can turn things around in a way that the existing management has, having built up a once successful business, been unable to?

    Given that those who try (or are forced) to follow all the endlessly escalating rules and regulations when writing new business are finding that such activities have now become all but profitless, what scope is there for turning this around for RSMT? Is it already on the other side of no tomorrow?

    Elsewhere, Natalie Ceeney is quoted as having said that “IFA’s only get complaints once in a blue moon”. From the way in which the FSA continues to pile on the grief without mercy or respite, anyone would think intermediaries are responsible for vastly more than just 1% of all complaints referred to the FOS. Where’s the proportionality and appropriate targetting of the FSA’s resources? Why is it so maliciously obsessed with beating up the good guys?

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