Recruitment groups in bid talks
Article Date: Jul 27 2007AIM recovery play Berkeley Scott is negotiating a potential £30 million cash bid for fellow recruitment group Quantica.
Taken in hand at the beginning of the year by respected recruitment veterans Tony Reeves and John Browne, formerly lacklustre and loss-making Berkeley Scott is back on form and talking to Quantica, another AIM counter, about making a cash bid with a paper alternative. Berkeley Scott, advised by Daniel Stewart, says the offer will be no higher than 50p for Full List refugee Quantica, which increased profits 190 per cent last year to £7.5 million, helped by the £5.5 million disposal of its healthcare recruitment arm.
Such a deal would be a big bite for Surrey-based Berkeley Scott, whose AIM value is only £13 million, less than half the £27 million market tag of its target Quantica. Berkeley Scott is now talking to institutions about a placing to fund the bid.
In cash terms, it would not represent a terrific exit for Quantica, whose shares hit 73p last year, though the suggested terms would represent a sizeable premium over the 28p to which Quantica had sunk last January. At 45p, the shares are unchanged today.
The market certainly interprets the mooted deal as good for Berkeley Scott, whose shares had collapsed from 87p in early 2005 to 13.5p last year before the Reeves/Bowman team took the helm. Recommended by Growth Company Investor at 36p in January, they have risen to 56p, up 6p today.
Hold on.
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