Baker Tilly has acquired top 10 accountancy firm RSM Tenon from their Administrators by means of a pre-pack sale.
Earlier today (22 August 2013) Baker Tilly appeared to pull out of the acquisition but did not rule out any future purchase of specific parts of the firm. Within hours, RSM Tenon admitted it would not be able to meet its loan obligations and Deloitte was appointed administrator. They immediately announced a sale of Tenon’s trading entities to Baker Tilly. The shares were suspended with immediate effect.
RSM Tenon said that the terms of the sale agreement means that Lloyds will not recover borrowings of £80.4m in full. However, the acquisition will receive financial backing from Lloyds TSB Bank plc.
Commenting on the sale, Phil Shohet, director of M&A specialists Kato Consultancy, said:
‘Maybe Baker Tilly thinks they can pick up £100m worth of clients’ business but it’s hard to see that clients will not change firms. There are a number of acquisition risks, such as loss of clients, fee income and restructuring costs. It is going to be a big salvage job; what will Baker Tilly do with all the unwanted partners, for example,’
The acquisition will not formally be completed until after a vote at a meeting of shareholders in late August. However, a sufficient majority have already committed to supporting the transaction.
In recent months, RSM Tenon’s shares had fallen from a high of £8 to just over £1 in recent days.