Carter & Carter withdraw BPP offer
At the end of last month Carter & Carter (C&C) withdrew their 725p per share offer to BPP, after BPP’s management rejected it as materially undervaluing the company. C&C are the second largest shareholder in BPP after Schroders who own 21% of the scrip. With C&C walking and BPP refusing to open its books, C&C are now precluded from making another bid for six months.
What seems odd about this is that in April 2006 BPP’s Chief Executive sold £640k (about 1.3m) of his own shares to a Tender Offer priced at 475p – this was out of a total of £34.5m of shares tendered. While BPP’s share price has risen significantly since last April’s tender, from a low of 387.75p in June to a high of 708p in March, it seems odd to reject a bid with a premium of 17p?
We suspect what BPP and its management are waiting for the result of investigation by the Advisory Committee on Degree-Awarding Powers at the Quality Assurance Agency, who will make a recommendation to the Privy Council for Degrees about whether or not to approve BPP’s application to award UK degrees. The decision is due in 2007 although the QAA could give no specific timeline.
Schroders, BPP’s largest investor, did not sell any of their shares in last April’s Tender and have publicly expressed their disappointment at BPP’s outright rejection of C&C’s offer. Philip Carter, who tragically died in May in a heliocopter crash, had recently announced a 25% rise in pre-tax profits at C&C.