Baker Tilly would pay ‘minimal’ fee for RSM Tenon

Professional services firm RSM Tenon has confirmed its shares will have a minimal value in the event of an offer of acquisition from Baker Tilly because of the level of debt within the business.

RSM Tenon announced in July it was in talks to be acquired by Baker Tilly after Baker Tilly made an “unsolicited” approach for the business.

The firm’s share price then fell 34 per cent to 2.25p and has since fallen to 1.4p.

An RSM Tenon statement says: “Discussions with Baker Tilly UK Holdings Limited are continuing.  However, it is now likely that, as a consequence of the company’s high debt level, if an offer is made by Baker Tilly, minimal value, if any, will be attributed to the issued share capital of the company.

”Lloyds Banking Group plc continues to be supportive of the business as the company discusses with it ways to address its high level of borrowings.”

RSM Tenon made a pre-tax loss of £7.5m for the six months to 31 December, compared to an £83m loss in the same period in 2011.

The accounts said at the time the company was involved in a dispute with its professional indemnity insurers over a £4.3m FSA settlement dating back to 2010 for missold Lehman-backed structured products and unsuitable pension switching advice.

The firm’s huge losses in 2011 were largely due to exceptional items relating to a £63.7m goodwill writedown and the FSA settlement costs.

Dentons Pension Management bought RSM Tenon’s Sipp arm, Tenon Pension Trustees, for an undisclosed sum in March.

In December, RSM Tenon dropped PricewaterhouseCoopers as its auditor following a long-running battle about the quality of PwC’s auditing.