Tenon chairman explains MBO move

Tenon chairman Neil Johnson has told Accountancy Age that the move
to consider an MBO is aimed at addressing a share price the company believes is
too low.

Speaking to Accountancy Age, Johnson said the board had to consider
chief executive Andy Raynor’s MBO proposal as it could deliver better value for
the company than is currently reflected in Tenon’s share price.

‘Tenon is approaching the three-year point as a listed company and has made
good progress,’ said Johnson. ‘The business has transformed and stabilised and
we feel this value is not reflected in the share price. There is no point in
complaining about it, we are where we are. An MBO could be a catalyst to show
that the business is worth more and crystallise that value for internal and
external shareholders.’

Raynor is believed to have put forward the idea of an MBO because he believed
that Tenon’s fee earners could be better rewarded in a private structure instead
of as a listed company. Unlike the majority of listed companies, 30% of Tenon’s
share capital is held internally and it is believed that fee earners would be
remunerated better as partners instead of shareholders.

Johnson said this was an ‘interpretation’ of how an MBO could enhance value.

‘The capital values in a conventional partnership could be better than as a
public company. We have to keep an open mind and consider all the ways we can
release value,’ said Johnson.

Tenon’s share price 19.3% up at 29.25p on the back of the MBO news.