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Around the Web – Morson shareholders revolting over privatisation deal

04 July 2012

After the UK staffing firm Morson Group (MRN:LSE) announced in late May that it will go private, a group of shareholders are said to be in an “open revolt as the management buy-out of the Aim-quoted recruiter edges closer”, the Financial Times writes.

This comes after MMGG Acquisition made the offer which mainly comprises Morson’s executive management team of Gerry Mason (Chairman), Ged Mason (Group Chief Executive), Paul Gilmour (Group Finance Director) and Kevin Gorton (Group Managing Director).

The executive management team agreed a 50-pence-per-share offer with the firm’s independent directors, giving the company a market capitalisation of around £23 million. But the FT writes that this has been fiercely criticised since its announcement in May at a 20.5% premium to the previous days’ closing price.

“When I heard the 50p offer I was speechless,” David Medlock told the paper. He is chairman and chief executive of rival firm, Sitec, and owns more than 6% of Morson, urging the management to improve its terms.

Another shareholder, Michael Stern, argued that the Morson shareprice six years ago floated at 160 pence, giving the firm a value of £72.6 million while at peak times in 2007 the shares were 256 pence, valuing the Group at more than £100 million.

Kevin Lapwood, head of support services equity research at Seymour Pierce, said in the paper that “Small companies are finding it difficult to raise funds in the current environment and deals like this don’t do Aim’s reputation any good at all.”

The firm reported in March that annual revenue in 2011 was up +11% to £507.9 million from £457.6 million in 2010. But the company also said it expected 2012 to be a “challenging” year as margin pressures are to continue after net profit dropped sharply.

Morson Group is a UK-based company, operating in human capital resourcing, including acting as an employment business, a recruitment agency and the provision of technical personnel for engineering management and design consultancy. 

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