(Alliance News) - A leading shareholder in Kin & Carta PLC has unequivocally rejected the bid for the company from Apax Partners LLP calling it "opportunistic and inadequate."

Coast Capital Management, which holds a 6.5% stake in the London-based business consultancy, said it was "immeasurably disappointed with the board’s failure to seek a fair value for shareholders."

On Wednesday, Kin & Carta PLC agreed to a more than GBP200 million takeover offer from Apax which represented a 41% premium per share compared to Kin & Carta's closing share price of 78 pence the day before.

The 110 pence per share cash offer from Apax, a private equity advisory firm based in London, valued the firm at GBP203 million.

Apax said it views Kin & Carta as a "high-quality business with a strong platform in the digital transformation sector, particularly in view of its impressive roster of blue-chip enterprise customers, recognised brand and capabilities in key areas of the sector."

But Coast Capital Management believes the board and its advisors have failed to conduct a fairness opinion, and have failed to proactively reach out to multiple other potential acquirers who have previously expressed interest in the company.

It also noted the offer comes at a 30% discount to the consensus analyst price target of 160 pence and values the company at just 13 times forward earnings, a near 40% discount to Thoughtworks – a publicly-listed peer that is majority owned by Apax.

It accepted the industry has been in the midst of a temporary downturn, but said current earnings fail to reflect the company’s true earnings power.

Coast pointed out other than the board of directors no shareholder has provided an "irrevocable agreement" to support the Apax bid.

Shares in Kin & Carta closed 0.6% higher at 108.00 pence in London on Thursday.

By Jeremy Cutler, Alliance News reporter

Comments and questions to newsroom@alliancenews.com

Copyright 2023 Alliance News Ltd. All Rights Reserved.