Jenzabar, the largest shareholder in Tribal Group, has gatecrashed the education software company's sale with a possible cash offer worth £238 million.
The US group, which owns 26.19% of Tribal, is urging investors to vote against the planned sale of the business to Main Capital Partners at Friday's general meeting.
Its possible 111p offer is about 5.7% above the roughly 105p a share shareholders stand to receive under the Main Capital deal.
It is also 76% above Tribal's 63p share price on 10 September, before the sale was announced.
Two routes to the cash
Main Capital's vehicle, Thames Bidco, is buying Tribal's businesses rather than its shares.
Under that structure, Tribal would leave AIM and go into a members' voluntary liquidation, a formal wind-up of a solvent company, with cash returned to shareholders in due course.
Jenzabar says its offer would pay shareholders directly under the Takeover Code, removing the cost and timing risks of a liquidation.
The Main Capital price has already risen once, from about £189.3 million to £231.2 million between 11 and 27 September.
Jenzabar argues that a price capable of moving £41.9 million in 16 days has not been fully tested.
It also says the deal values Tribal at 13.2 times last year's earnings before interest, tax, depreciation and amortisation (EBITDA), below the 13.8 times multiple offered by rival Ellucian in 2023.
A locked-up register
The challenge faces a significant hurdle.
Holders of about 52.7% of Tribal's shares have signed irrevocable undertakings to back the sale, and these will not lapse even if a higher offer arrives.
Jenzabar wants the Tribal board to adjourn Friday's meeting so it can complete due diligence and firm up its bid.
It says the offer would be funded from existing cash, debt facilities and third-party financing still to be finalised.
Jenzabar also says it has addressed the funding and competition concerns that led Tribal to reject a separate 95p approach.
Proxy votes must be in by 9.30am on Wednesday.
Jenzabar has until 27 October to make a firm offer or walk away.
