Brave Bison Group (LON: BBSN), the digital media company, has raised its hostile takeover offer for System1 Group (LON: SYS1), the AIM-listed market research firm, for a fourth time, to 135p in cash plus 2.394 new Brave Bison shares per share, an implied 360p.
System1 shares closed at 330p on Friday, down 2.4% from Thursday’s close of 338p, having traded below the new offer level throughout. Brave Bison’s own stock, which prices most of the consideration, ended Friday unchanged at 86p. The move coincides with the announcement but has not been confirmed as a reaction to it.
Brave Bison, already System1’s largest shareholder with a 27.85% stake built in a February strategic purchase, has been trying to buy the rest of the company since June, moving from two non-binding proposals to a firm Rule 2.7 offer in July. Each time, System1’s board has unanimously rejected the approach, arguing it undervalues the business and criticising Brave Bison for lacking irrevocable shareholder support. Brave Bison has now disclosed non-binding letters of intent covering 38.9% of System1’s shares, including its own stake and support from former System1 chief executive Stefan Barden and his family.
The new terms value System1 at 360p a share, based on Brave Bison’s 20-day volume-weighted average price of 94p on the 10th of July, an 82% premium to System1’s undisturbed 198p price in February, before Brave Bison built its stake, and a 10% increase on the Third Offer’s implied 327p from the 30th of July. Because more than half the consideration is Brave Bison stock, the cash-equivalent value shareholders would actually receive moves with Brave Bison’s own share price, which has been volatile since June.
System1’s board, advised by broker Canaccord Genuity, has not yet issued a public response to this latest increase. The Fourth Offer remains conditional on acceptance from more than half the voting rights Brave Bison does not already hold. Brave Bison has said that reaching 75% of System1’s shares would trigger a delisting from AIM and a move to take the company private.