Statement regarding TP Group plc
Following the announcement by TP Group on 10 August 2021 and Science Group’s response of the same date, Science Group requested that TP Group provide information to enable Science Group to consider whether or not to make an offer to acquire TP Group. With a track record of delivering value to shareholders, a strong balance sheet and clear operational synergies with TP Group, Science Group is a credible British, London-listed partner for the Company.
An indicative proposal was made via advisors on the morning of 12 August and confirmed in writing on 13 August 2021, potentially offering a significant premium to the TP Group share price of 3.9 pence prior to Science Group’s investment. This proposal requested due diligence information and agreement to an extension of the current offer timetable to enable Science Group to complete its evaluation. The Board of TP Group notified Science Group late on 15 August that the proposal was rejected without any discussion or engagement.
In the context of the financial performance of TP Group, the obstructive approach of the TP Group Board is indefensible. On 28 July 2017, TP Group completed a £20.8 million fund raising at 6.5 pence per share. On 6 August 2021, the last trading day prior to Science Group’s share purchase, the closing mid-market share price of TP Group was 3.9 pence. In the 2020 Annual Report, the Board and the Company’s independent auditors highlighted TP Group’s poor financial position including the uncertainty for the Group and the Company to continue as a going concern. All of the current directors of TP Group plc, except the new CEO, were appointed prior to the July 2017 fund raising and have therefore presided over the value deterioration over the past four years.
For the avoidance of any doubt, Science Group has not withdrawn its interest in potentially making an offer for TP Group. However while Science Group believes there are considerable benefits for all stakeholders from a combination of the organisations, with the uncertain financial position of TP Group, it is unlikely that Science Group will be able to make an offer if the TP Group Board continue to refuse to cooperate. Science Group continues to encourage the Board of TP Group to engage in a constructive manner.
Alternatively, as outlined in the announcement on 10 August, the initial approach to TP Group by Science Group was in relation to a potential strategic investment. Science Group is now the third largest shareholder in TP Group and, for the avoidance of doubt, is not interested in considering any offers for its stake from third parties. In the event that the Board of TP Group persist with their refusal to cooperate, and as a result Science Group is unable to make an offer for TP Group, Science Group will retain its shareholding as a strategic investment. Science Group may or may not make further share purchases in the market. Science Group will adopt an active engagement strategy in managing its investment.
The strategic investment model must now be considered an increasing possibility. Accordingly, in view of the conduct of the TP Group Board which, as a large shareholder in TP Group, Science Group considers to be wholly unacceptable and not in the best interests of TP Group shareholders and other stakeholders, Science Group has today written to the Board of TP Group requesting that a General Meeting be called in order to enable TP Group shareholders to consider the :
- Removal of Mr Andrew McCree as a director;
- Removal of Mr Jeremy Warner-Allen as a director;
- Appointment of Mr Martyn Ratcliffe as a director; and
- Appointment of Mr Peter Bertram as a director