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Creston in Buy-Out Talks
UK-based insight and communications group Creston, which owns market research agencies ICM and CML, has confirmed it is in talks over a possible buy-out funded by an as yet unnamed private equity firm.
In an announcement to the stock market, Creston said the process had reached the final stages of due diligence and the arranging of finance, but said there could be 'no certainty that an offer will be made'. Current board members including CEO Don Elgie and CFO Barrie Brien are said to be in line for equity and senior management positions in the proposed deal. A committee of independent directors including non-executive chairman David Marshall, and NEDs Andrew Dougal and Malcolm Wall has been set up, with Rothschild as advisor.
Rumours suggest that the bid could value shares at 80-90 pence, a considerable premium to the current trading price which has already jumped from around 39p on Thursday to 56p on Friday, giving it a market capital of around £31m. However, the price was much higher a year ago, touching the 140p mark.
Creston has had a mixed year to date, closing a relatively recent New York office in February due to 'uncertain economic conditions', but reporting strong results in June - profits were up 25% for the year ending 31 March 2008 - and saying it had yet to feel the impact of the economic downturn.
The Insight Division, which accounts for 22% of group revenue, delivered a 16% revenue increase to £17.9m in the June figures. In addition to the recently merged sensory panel company MSTS and product development specialists Marketing Sciences, the division includes the ICM group of companies which were acquired in April 2006. Web site: www.creston.com .
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