Danson in £12m SPG bid
Article Date: Oct 06 2008Entrepreneur Michael Danson’s Progressive Capital is offering 13p a share in an agreed bid for business-to-business concern SPG Media.
Danson, who founded research group Datamonitor and sold it last year in a £500 million deal and who is also a co-owner of the left-wing New Statesman weekly, has pitched Progressive’s cash bid for AIM-quoted SPG at 70 per cent above SPG’s closing price the day before bid talks were opened in August.
Progressive, set up last year to buy promising media assets, says it has already received ‘irrevocable’ acceptances on behalf of 48 per cent of the equity of SPG, which is advised by Blue Oar Securities.
The offer puts a value of £11.85 million on London-based SPG, which operates controlled circulation magazines, internet reference portals and business conferences, and made £430,000 pre-tax profit in the year to March on turnover of £17.2 million. Danson says Progressive can provide the ‘level of investment necessary for SPG to deliver sustainable long-term growth and, where necessary, by making additional business acquisitions’.
SPG chairman Stephen Davidson, who has seen the shares plunge from 12p in 2006 to 4.5p last year before recovering in 2008, argues that the company’s share rating – up 3.25p today to 12.25p – ‘fails to reflect its underlying value’ but says Progressive’s offer gives ‘a certain value now by providing shareholders with a cash exit’. In the absence of a sudden counter-bid (not easy if all the irrevocable acceptances stay that way), Danson’s bid looks like prevailing.
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