UK Timeweave Plc (LON:TMW), a provider of broadcast services to the bookmaking industry, rejected on Friday the GBP0.22 (USD0.36/EUR0.27) a share takeover offer from British investor Joe Lewis’ company Mayfair Capital Investments Limited, advising shareholders not to accept it.
Bahamas-based Mayfair, owner of 29.99% in Timeweave, announced on 6 September a proposal to buy the rest of the company in a deal which would value the target at around GBP49.6m. The offer documents were posted to Timeweave shareholders on 11 September.
Timeweave’s independent directors said they had looked into the merits of the bid and had concluded that it would not serve the best interest of shareholders as it fails to reflect the full value of the company. While the offered price is a premium of some 12.8% to Timeweave’s closing on 5 September, it offers no premium to its 12-month to 5 September volume weighted average price and it is about 5.3% below the 24-month volume weighted average price prior to 5 September.
The independent directors said that the offer could represent a loss of value for shareholders who would accept it compared to the alternative of Timeweave’s strategic plan of seeking further investment opportunities.
Refering to Mayfair’s plans to delist Timeweave at reaching an ownership level of 75%, the company’s directors said that such a move would substantially lower the liquidity and marketability of any Timeweave shares not tendered to the bid.
In its statement from 6 September the buyer said that Timeweave shareholders controlling a combined 15.80% in the company, have pledged to sell their stock to Mayfair, bringing its total interest in the company to 45.79%. The offer is subject to gaining an ownership level of over 50%.
The Timeweave Group owns 50% in Amalgamated Racing Limited, the owner of exclusive licenses with 34 racecourses to broadcast pictures, audio and data from these courses to licensed betting offices in the UK and Ireland. It also holds 49.9% in British TV producer and distributor DCD Media plc (LON:DCD) as well as SportingWins Limited, a firm writing hedging agreements to cover financial risk of corporate clients dependent on the results of professional sports events.
Investec Investment Banking is advising Timeweave in connection with the buyout offer.