Tenon U-turn on going private

Three months ago, Tenon chief executive Andy Raynor denied that the group was
planning to go private, and emphasised the board’s commitment to enhancing
shareholder value.

Those intentions were turned upside down today when the group announced that
a senior management team, led by Raynor and recently appointed finance director
Lesley Spencer, were interested in making an offer for the business.

When he released the final results for the year ended 30 June in October last
year, Raynor said the board was ‘dedicated to increasing real shareholder value’
and was determined to pursue this objective ‘by all available means’.

Rumours were circulating at the time that Tenon had approached private equity
firm Alchemy Partners to take it private, which Raynor quashed, but since then
the group has endured a difficult three months.

Six weeks after the results, where Tenon reported an increase in turnover
from £80.6m to £100m and a climb in profits after exceptional items from £2.8m
to £3.1m, the listed firm lost two senior executives and saw its share price
fall 17.1% to 27.7p.

Finance director Matthew Brabin and chief operating officer Bill Davidson
left the group to ‘pursue other interests’ after Tenon warned that the
transactional parts its business had experienced a slower first half than in
previous years. Spencer then joined, taking on both operational and financial
responsibilities.

The MBO comes in the midst of these difficulties and the board has considered
the option after considering the potential financial and operational effects of
an MBO on its business model and market position.

For more background on Tenon, go to
www.accountancyage.com/2143855