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TheStreet Open House

Perform Says Blavatnik Could Do Better

LONDON ( The Deal) -- British sports rights company Perform Group on Wednesday rejected a 701.6 million pound ($1.2 billion) takeover offer from its major shareholder, Len Blavatnik's Access Industries, saying the bid undervalues the company and its prospects.

Feltham, England-based Perform had already reacted unenthusiastically to offer of 260 pence a share for the 57.5% of the company that Access does not already own, when the bid was first announced on Monday. It said at the time it was confident of its existing strategy and growth prospects.

And while its latest statement made clear that it values Access as a supportive, long-term shareholder, it said its own board members would not be accepting the offer for their own stakes in the company, which add up to 10.8% of the shares.

Perform has now appointed Warner Mandel of Rothschild to advise it. It said it will write to shareholders with its detailed views on the offer, once Access formally launches its bid for the remaining shares in the company.

Access could have to pay up to 410.3 million pounds depending on the take-up of the offer by Perform's other shareholders. Access has said the offer is final and will not be raised, but must now go ahead and publish the formal offer document -- effectively going over the heads of the Perform board with a direct approach to shareholders -- or walk away for at least six months.

It has to acquire at least 75% of Perform's share capital to be able to start the process of delisting the company.

The offer is pitched at a premium of about 21.7% over Perform's average August closing price of 213.6 pence. It is 27.6% higher than Perform's Friday closing price of 203.8 pence. On Monday Access went public with its announcement, just after Perform published first-half results and said it had completed the "heavy lifting" involved in cutting costs and putting the company back on track for growth. It said first-half revenue was up 29% compared with the same period last year, at 118.8 million pounds, but Ebitda was virtually unchanged at 15.63 million pounds.

The market had been unimpressed by that statement and the shares had fallen back, apparently prompting Access to make its move. The shares were little changed at 258.5 pence by early afternoon on Wednesday.

As well as Rothschild, Perform is advised by the law firm Freshfields Bruckhaus Deringer LLP.

Access is advised by David Wheeler, Stuart Upcraft, Stuart Field and Joe Hannon of Credit Suisse Group and Peter King, Ian Hamilton, Max Oppenheimer and Tayyibah Arif of law firm Weil, Gotshal & Manges LLP.

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