London-based recruitment firm Work Group PLC said it is in advanced negotiations for the reverse takeover of law and professional services firm Gordon Dadds Group Ltd.

The reverse takeover bid by Work Group values the acquisitive law firm at £18.75 million. If it goes ahead, the law firm will join London’s AIM market. The valuation would leave the share capital of the enlarged Work Group at a ratio of 15:1 between current Gordon Dadds shareholders and Work Group shareholders.

Work Group is also looking to raise up to a further £20.0 million by the accelerated bookbuild placing of up to 457.1 million shares at 4.375p each to institutional investors. The proceeds of that placing will be used to repay borrowings of Gordon Dadds, provide working capital for the enlarged group and to fund further acquisitions.

Work Group noted the negotiations are ‘very advanced’ but there can be no certainty any offer will be made or as to final terms. Under UK takeover panel rules, Work Group must announce a firm intention to make an offer or not by August 8.

Shares in Work Group have been suspended since December pending publication of the acquisition details.