Deloitte administrators arrange pre-pack at RSM Tenon

DELOITTE ADMINISTRATORS have sold RSM Tenon to Baker Tilly in a pre-pack administration.

Matt Smith, Nick Edwards and Clare Boardman of Deloitte have been appointed to the firm and immediately agreed a sale of the company’s trading entities to Baker Tilly.

The administrators were appointed to Premier Strategies, a subsidiary entity which historically provided tax advice but ceased selling new business in March 2012.

The administrators said that under a proposed sale of the trading entities of the group to Baker Tilly, subject to certain approvals, no job losses are expected.

Currently the group operates out of 35 offices and employs about 2,300 staff.

Smith, said: “Immediately following our appointment, a sale of RSM Tenon Group plc’s trading subsidiaries to Baker Tilly was agreed and is expected to complete within two weeks, following regulatory and internal approval at Baker Tilly, which we are advised is a formality.

“We believe the proposed sale to Baker Tilly represents the best outcome for the RSM Tenon group. The management of the group have stabilised the business, returning it to profitability over the past 18 months and making this transaction possible to secure its future.

RSM Tenon Limited, RSM Tenon Investment Solutions Limited, RSM Tenon Financial Management Limited, RSM Corporate Transactions Limited, RSM Tenon Corporate Finance Limited and certain non-trading subsidiary companies remain out fo the insolvency process and are included in the agreed sale to Baker Tilly.

As part of the announcement it was revealed that Lloyds, the sole lender, would not be willing to grant a covenant waiver and consequently the board concluded that administration was the appropriate course of action.

Earlier this morning Baker Tilly announced it would not make an offer for RSM Tenon’s entire issued share capital. However, Baker Tilly said it would be interested in an acquisition of “part or all of the business”.

Discussions about a possible merger or buy-out between the two firms were revealed at the end of July, however earlier this month RSM Tenon told investors they would receive minimal if any return should Baker Tilly buy the firm.

“It is now likely that, as a consequence of the company’s high debt level, if an offer is made by Baker Tilly, minimal value, if any, will be attributed to the issued share capital of the company,” the announcement at the time said.

RSM Tenon’s share price has declined 78.37% since February’s announcement in the six months to yesterday, according to the Share Price Centre. Shares closed at 1.37p yesterday, with an estimated market cap of £4.04m.

In February, RSM Tenon announced it was unable to reach a new agreement with its sole lenders Lloyds Bank to “reset” the terms of its lending facility, though it added that discussions were ongoing.

The announcement came in its interim results, which revealed the covenants on its credit facilities were set and based on a larger firm than it now operates. Unless a reset was achieved it was likely to breach its covenants in the forthcoming 12 months.


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