Case study 6

Seeing off an aggressive bidder

Nigel's client was the chief executive of a successful quoted company, which had become an acquisition target, because a predator saw strong operational benefits from merging the two businesses. The predator bought shares in Nigel's client and approached the major institutional shareholders, suggesting that that the chief executive and his team were managing his business poorly and that the business should be sold to the predator.

Over several months, Nigel helped his client by:

  • introducing him to an investment bank knowledgeable about the industry and good at defending against hostile bids
  • helping him ensure that his board and advisers were clear where shareholders’ interests lay
  • reviewing a proposal to sell a major subsidiary to achieve an attractive exit from a low growth sector
  • helping structure a sale process that secured a premium price for the subsidiary from the predator itself
  • drawing out arguments to put to shareholders setting out the higher growth potential of the streamlined business
  • advising on handling discussions about possible bid values with the board and the predator

After much discussion, the board and shareholders saw more potential value in the business than the predator was willing to pay, and it withdrew.