RSM Tenon sold to Baker Tilly in pre-pack deal

Marion Dakers

RSM TENON was pushed into administration yesterday as its main lender and eventual buyer Baker Tilly failed to strike a deal for a solvent takeover.

The UK’s only listed accountancy firm, which had already warned investors that its shares were worthless, called in Deloitte to arrange the pre-pack administration.

Baker Tilly will close its deal to absorb RSM Tenon’s trading entities over the next two weeks, in an arrangement that has so far not resulted in any job cuts among the firm’s 2,300 staff.

Baker Tilly declared when the markets opened that it would not make an offer for RSM Tenon’s shares, leaving administration as the sole option for a deal.

The group had spent a month in takeover talks with Tenon, but the latter’s £80m debt with sole lender Lloyds Banking Group was a major stumbling block in the negotiations.

Lloyds will not be paid in full under the pre-pack, the administrators said yesterday, though none of the parties involved would comment on how much it is likely to get back.

The bank had warned RSM Tenon that it would not grant a waiver if the firm turned out to be in breach of its loan covenants.

“We have supported the company for many months while it considered its options and all parties worked hard to achieve an outcome without the need for administration. Ultimately this was not possible,” said Lloyds, which also provided financing for yesterday’s sale.

Tenon’s non-executive directors are understood to have left the firm immediately. Chief executive Chris Merry and chief financial officer Adrian Gardner will stay on to help with the integration, but are also expected to depart.

The company has struggled since it revealed in January 2012 that it had overstated its results, leading to a profit warning and the departure of chief exec Andy Raynor.

Shares in RSM Tenon have dwindled from a peak of 66p in January 2011 to 1.12p yesterday.

Laurence Longe, Baker Tilly’s national managing partner, said “combining our strengths and skills will provide us with new opportunities for growth”.




BIG FOUR accountancy group Deloitte was yesterday hired to work on the pre-pack administration of RSM Tenon Group PLC along with smaller legacy subsidiary Premier Strategies Limited.

After a flurry of activity overnight that saw Deloitte sell the business to Baker Tilly yesterday morning, the administrators will now work with RSM Tenon’s management for the next few weeks as the deal closes and Baker Tilly begins to absorb its operations.

Deloitte named Matt Smith, Nick Edwards and Clare Boardman as the joint administrators.

Edwards, a restructuring partner, has worked on several high profile administrations in recent years including sports broadcaster Setanta in 2010, white goods retailer Comet in 2012, and music group HMV earlier this year.

Smith, an alumnus of Ernst & Young, joined Deloitte in 2007 and has recently worked on the administration and sale of Blockbuster UK.

Boardman is a restructuring services partner based in Deloitte’s Leeds office.

On the legal aspects of the deal, Baker Tilly was advised by Stephenson Harwood, while Macfarlanes advised RSM Tenon. Lloyds Banking Group took advice from Hogan Lovells.