Belvoir Lettings 'disappointed' by TPFG's response to merger offer

AIM-listed Belvoir Lettings said it was "disappointed" with the response it received from The Property Franchise Group (TPFG), which rebuffed its merger offer last month.

On 19 October, TPFG knocked back Belvoir's offer on the basis that it would not be in the best interests of its shareholders. Under the terms of the offer, existing TPFG shareholders would have got up to 0.7150 Belvoir shares and 52.20p in cash in exchange for each TPFG ordinary share and TPFG shareholders would control around 35% of the merged group.

In a statement on Wednesday, Belvoir said it wanted to provide clarity on a number of points made in TPFG's announcement on 20 October, in which it went into more detail about why it had rejected the offer.

Belvoir said that contrary to what has been stated, its merger offer was not an unsolicited approach, but rather a response to a willingness to engage in discussions expressed to the board on more than one occasion by TPFG. In addition, it argued that the key terms of the offer were structured to reflect that prior engagement.

Chairman Mike Goddard said: "The possible merger offer was proposed with the intention of treating both Belvoir and TPFG shareholders equally, save for the possibility of the latter being able to take some money off the table as part of this process.

"We understood this to be an important component for the TPFG shareholders prior to submitting our merger proposal to the TPFG board, however the proportion of cash can be reduced and the proportion of shares increased accordingly.

"We are disappointed with the TPFG board's refusal to discuss the possible merger offer and believe that the shareholders of both companies will recognise the potential benefits that the enlarged group ought to be able to generate in the medium term. We recognise that the TPFG board speaks for approximately 49.3% of TPFG's shares but would hope as a matter of process that they will fully consider the merits of the possible merger offer in the context of the TPFG shareholders as a whole."

Goddard added that the company remains "very willing" to have an open and constructive discussion with the TPFG board about the merger offer.

At 1040 GMT, Belvoir shares were up 2.3% to 110p and TPFG shares were up 2.6% to 140p.