Brave Bison LON:BBSN the AIM-listed, London-based digital advertising and technology services agency, locked-horns with and set its sights set on the acquisition of AIM-listed competitor, the Mission Group LON:TMG, but announced yesterday (10th June) that it was stepping away from its mission to buy the creative digital agency.
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As previously reported Brave Bison, which runs the Social Chain agency, had a roadmap of acquisitions to grow market share in a rapidly expanding sector. Initially bidding GBP27m for its rival, a bid that was batted away as “opportunistic” by the Mission Group, Brave Bison went back in for the creative agency, upping its valuation from 29p a share to 35.1p a share, valuing the business at around GBP32.3m. The transaction would be funded by an all-share offer at an exchange ratio of 13.9 Brave Bison shares for each ordinary share in the Mission Group, and a partial cash alternative of up to 50% of the potential offer price.
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Brave Bison also said that it was planning on paying off a portion of the Mission Group’s GBP26.8m debt through an underwritten share placement and help the company: “create a sustainable capital structure for the enlarged company.”
Unsolicited and uncertain
However, the Mission Group also gave this short-shrift, calling the approach “unsolicited” claiming that: “the amount of such partial cash alternative and the quantum of any proposed reduction in indebtedness for the proposed combined group is not certain and will be determined by Brave Bison following a period of due diligence” and rejected the offer stating that Brave Bison was undervaluing its business and future prospects, diluting the Mission Group’s existing shareholders and the proposal to deal with the company’s net debt would further dilute its shareholders.
Mission Group also threw shade at Brave Bison’s valuation of its debt, saying the valuation was inclusive of acquisition costs and reiterated that it had already come to an arrangement with its bankers, NatWest, to extend its facilities to April 2026.
Disappointing lack of engagement
Brave Bison in response said that the Mission Group refused to provide access to due diligence information or key management personnel, or extend the deadline to make another offer, stating that it was: “[…] disappointed by the lack of engagement from the Mission board and does not believe that the Mission board’s strategy to deleverage the business will deliver value for Mission shareholders in excess of the revised proposal,” and then withdrew from the field.
Brave Bison opened the week (10th June) at 2.44p rose to 2.455p and then fell back to its opening level by lunchtime. The Mission Group opened at 25.04p, fell to 23.25p but recovered before Monday afternoon’s trading session to 24.75p. The Mission Group’s shares have fallen 50.4% over one-year, whereas Brave Bison is up 3.8%.
