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Angle grinds out a point

Created:
18 July 2008
Updated:
30 July 2008
Written by:
Malar Velaigam

Shares in technology group Angle plunged 10 per cent as the group announced it had rejected a 60p a share all-share offer from Braveheart, after weeks of squabbling between the two parties. It cited the lack of synergies and relative valuations as its rationale.

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While management at Angle noted the significant premium - the indicative offer is more than double Angle's previous share price - the board felt that Braveheart could not add value to the group, saying that the Braveheart board had "no experience or capability" in the US - a key market for Angle's investment companies.

Angle's board also pointed out that Braveheart had not provided written "comfort" that additional funding would be available to Angle's portfolio of businesses, following Braveheart's assertion that it would seek third party funding rather than tap into its own cash resources.

Braveheart announced its intention to bid for Angle in April, claiming it had the support of all of the major institutional shareholders (which represent 36 per cent of the company), but hit hurdles when Angle's board delayed access to its books. That in turn kicked of an exchange of words between the two parties, with Angle taking a final swipe today - pointing out that Braveheart's shares are illiquid and that their price performance has been poor.

IC VIEW:

GoodValue

If the bid had been in cash, it would have been so much easier. The rejection of the offer shows that management are either deeply concerned about the future of the business, or extremely petty considering the 107 per cent premium Braveheart was offering. But with Angle just moving into profitability, more bid interest could yet arise. At 26p, good value.

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