Panmure Liberum has urged shareholders of Advanced Medical Solutions Group (AIM:AMS) to hold firm and reject any takeover bid that doesn’t come in above 300p a share, following confirmation late Thursday that Montagu Private Equity has made an approach.
While no formal offer has been tabled, the fact that interest from Montagu is now public adds weight to the long-running takeover chatter around AMS, a specialist in wound care products and surgical dressings.
Panmure warns that any deal now risks undervaluing the business, particularly with the share price still recovering from the knock-on effects of recent changes to inheritance tax rules.
The broker believes private equity could exploit this temporary weakness to pick up AMS on the cheap — an outcome that would benefit buyers, not long-term investors.
“This clearly isn’t what the Chancellor had in mind,” Panmure said, referring to the potential side effects of the tax changes, “but it may be the unintended consequence.”
Its message is clear: if an offer does come, don’t sell short. “We would urge investors to hold tight and reject any bid that isn’t north of 300p,” it said. AMS shares were down 1% 230.65p in trading on Friday.