Brightside-Markerstudy deal talks break down

Takeover talks between motor insurer Markerstudy and listed broker Brightside have broken down after Markerstudy cut its proposed offer to between 20p and 22p a share.

Brightside believes the new lower offer, down from 27p a share, “substantially undervalues” its business, and that further extensions of the offer deadline are damaging its commercial interests.

Brightside said in a stock exchange announcement this morning: “The board believes that a proposed offer price of between 20p and 22p per share fundamentally undervalues the company and therefore sees no need in proceeding with offer discussions with Markerstudy.”

In a statement released last night, Markerstudy said it had asked Brightside to extend the offer deadline, set at 5pm today, to allow it time to secure debt funding.

It also said it lowered the proposed offer in response to a negative trading statement issued by Brightside on 31 July, which predicted slower growth in new policy sales.

However Brightside response this morning said: “Throughout its discussions with Markerstudy about a potential offer for the company, the board has had concerns about its ability to secure the necessary debt financing to fund an offer and believes this to be a fundamental reason behind Markerstudy reducing its valuation of the company from 27p.”

‘Damaged interests’

It added: “The board is in no doubt that the commercial interests of Brightside are being increasingly damaged by the length of the current offer period. To this end, and following the reduction in the proposed offer price, the voard is not willing to extend the deadline under which Markerstudy must announce a firm intention to make an offer.

In its statement last night, Markerstudy asked for an explanation about why Brightside felt it was worth more than its new lower offer, and what it planned to do about the issues outlined in its trading update.

However, Brightside responded: “The company intends to announce its unaudited interim results for the six months ended 30 June 2013 on 18 September 2013. Within its interim announcement, the board intends to give full disclosure on its future strategic direction and growth initiatives.”