Jenzabar, the largest shareholder in Tribal Group (LON: TRB), has said it is considering a 111p-a-share cash offer and urged shareholders to vote down the Main Capital sale on Friday.
Tribal supplies student information system software to education institutions, and Jenzabar holds 26.19% of it.
Tribal shares traded at 102.25p in a delayed quote at about 8.15am today, up 2.25% on yesterday’s 100p close. That close was itself about 19.3% above Friday’s 83.8p, a jump that followed Main Capital’s price increase rather than Jenzabar’s statement.
Jenzabar, a US higher-education software company, made the statement at 6am. The 111p is a possible offer only, and there is no certainty a firm offer will follow. It also asked Tribal’s board to adjourn Friday’s meeting and engage with it.
Jenzabar described the vote in these terms.
The vote on 2 October is therefore not a vote on price; it is a vote on whether shareholders retain the right to consider a higher offer at all.
Jenzabar, Inc.
Jenzabar says its offer is fully financed, but the announcement says funding would come from existing cash and debt facilities and/or third-party financing “which are to be finalised”.
Main Capital, a private equity investor, is buying Tribal’s businesses through Thames Bidco. Its cash consideration has risen from about £189.3m to about £231.2m. The board says holders should receive not less than 105p a share after costs, an estimate that could prove lower. The 111p is a gross offer price, so the two are not like-for-like. Jenzabar calculates that it is 5.7% higher, and 76.1% above the 63p close on the 10th of September.
The obstacles are considerable. Irrevocable undertakings, binding promises to vote a set way, cover about 52.7% of shares. Those from Harwood Capital, Gresham House, Schroder Investment Management, Liontrust and RWC do not lapse if a higher offer appears. Tribal does not intend to issue a revised circular, and its board unanimously recommends the Main Capital terms.
The board earlier rejected a 95p approach from Silvertree on deliverability grounds. Tribal’s board recommendation for the Main Capital deal stands.
The proxy deadline, the last moment to lodge or change an advance vote, is 9.30am tomorrow. The meeting follows at 9.30am on Friday. Jenzabar must then make a firm offer or walk away by 5pm on the 27th of October.