BKR Haines Watts halts flotation

Link: Tenon ends buying spree

BKR Haines Watts, a 74-partner firm ranked number 15 in the Accountancy Age Top 50, has been in negotiation with London-based, 24-partner firm HW Fisher for some time, but the talks have been derailed by market issues.

Discussions began around two years ago and the firms had been hoping to combine and float on AIM this spring. The firms, which were using London broker KBC Peel Hunt and a leading accountant as advisers on the deal, are now understood to have put those plans on hold.

Market factors are believed to have weighed heavily on the decision to freeze flotation plans. Research by KPMG published in March showed that the main UK initial public offering market failed to attract any new trading company entrants in the first quarter of 2003.

Activity was limited to two investment trust listings raising a total of £14.55m, making it the quietest quarter for over 20 years.But it is the cloud that Tenon has cast over the whole consolidator sector that is thought to have sealed the decision not to go ahead.

The company, which pioneered the consolidator concept with its float in 2001, has seen its share price plunge from a high of 183.5p toward the end of 2000 to 17p on Tuesday.

In that time, it has also lost a finance director, a chief executive and a chairman. Last week new chief executive Andy Raynor said Tenon?s three-year buying spree was over.

The others consolidators have been bruised too, though to a much lesser extent. Numerica?s share price was 78.50p on Tuesday, down from a high of 122.5p, while Vantis stood at 84.5p, 11p off its high.

Problems in the sector are also thought to have dissuaded some firms from joining the established players or floating themselves.

Both Haines Watts, which enjoyed a fee income last year of £43.5m, and HW Fisher, which does not publicise its financial results, failed to return calls.

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