Tuesday, 24 March 2009

Private equity bid values TIG at 200%+ premium

(By Anthony Miller – Tuesday 24th March 2009 8:10am). Barely two weeks after Andy Roberts assumed the chair at insurance software and services player, The Innovation Group (TIG, see Andy Roberts takes chair at Innovation Group), the company has received an indicative 15p per share bid from private equity giant, Carlyle Group. TIG’s shares closed last night at 4.3p, 4% down on the day.

It would be fair to say that our coverage of TIG has not usually been flattering – we think with due cause. Indeed, I was invited to attend a private ‘therapy’ session with CEO Hassan Sadiq this very morning until I received a call a couple of days ago saying that he would not now be available.

For us this is a no-brainer. The TIG board rejected private equity approaches late last year mooted to value the company at 15-20p per share (see Innovation Group should "Take the Money") on the basis that “this was not at a level acceptable to the majority of the Company's shareholders”. The share price was then 3.45p. TIG shares peaked at a little over 7p in January before restarting another almost unremitting decline.

Far be it from us to give investment advice - indeed we are not 'authorised' to do so. But at the risk of repeating our musings, we really do believe Innovation Group should indeed “Take the Money”!

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