Giles to pay CBG chief £200k retainer

Giles plans to pay CBG chief executive Michael Askew a £200,000 retention bonus as part of its offer for his firm. Other key executives will also receive bonuses.

The offer document also reveals that there could be redundancies on both sides if Giles is successful in buying CBG.

Giles made a £5.1m offer for CBG on Tuesday. CBG’s board has recommended the offer to shareholders.

Askew’s retention bonus will be payable on the earlier of the date of publication of CBG’s full-year results or 31 March 2012. Payment is dependent on Askew still being employed by CBG at the time of payment and not being subject to disciplinary proceedings or notice period.

Giles has also proposed that key CBG employees will participate in a bonus scheme based on the performance of CBG under Giles’ ownership.

The proposed bonus will comprise a payment of 25% of any income above the forecast income for the 2011 year; and a further payment of 25% of any income above the forecast income for the period from 1 January and 31 August 2011.

Askew will be a beneficiary of the performance bonus in addition to his retention. The other beneficiaries will be decided during a post-acquisition review by Giles.

The offer document also reveals that Giles envisages some operational restructuring to achieve the planned benefits of the acquisition. This may lead to redundancies at CBG and/or Giles where there are overlapping functions or where the redundancies would improve efficiency.

However, Giles will not make any redundancy decision until after its post-acquisition review and consultation with employee representatives.

CBG’s non-executive chairman Robin Slinger and non-executive directors Stuart Mollekin and David Worsley will resign from CBG’s board when the offer is declared unconditional.

The first closing date of the offer is 24 August. The latest date the offer can be declared unconditional is 2 October. CBG will delist from AIM 20 days after the offer is declared unconditional. Giles has already received firm acceptances or letters of intent to accept the offer from 50.8% of CBG’s shareholders. The target is 90%.