Advisers seek rivals to Tenon MBO

In a bold bid to generate more interest in AIM-listed accounting group Tenon,
the company’s advisers have actively pursued potential buyers to challenge chief
executive Andy Raynor’s management buy-out plan.

This week, Tenon confirmed that there was ‘considerable preliminary interest’
from parties in addition to Raynor’s MBO team, and that the independent
directors and advisers were ‘exploring these approaches’.

Accountancy Age understands that some of this interest may have been
generated by Tenon’s advisers Numis.

BDO Stoy Hayward, PKF and Vantis ruled themselves out last month, but Numis
has been approaching possible bidders to draw more players in.

Tenon chairman Neil Johnson and Raynor would not comment, but senior sources
at leading mid-tier firms confirmed that Numis had sounded them out.

The news failed to ignite the group’s stock, however, which slid from 27.75p
to 26.75p. Analysts said the drop was a result of a profit warning that
accompanied the update on the MBO. The directors warned that following similar
guidance at its AGM in November 2005, profits before tax and exceptional items
for the full year were ‘likely to be marginally below the range of previous

Andrew Shepherd-Barron, a Tenon analyst at KBC Peel Hunt, said he had
downgraded his 2006 pre-tax profit forecast from £9.1m to £8.4m.

Tenon is set to communicate with the market in March, when it releases
interim results and is likely to provide more detail on the MBO and rival bids.

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