Battle underway for control of Restore as Marlowe bids rejected


A battle for control of Restore Plc (AIM:RST), the document management and relocation specialist, is underway.

Services and software group Marlowe PLC (AIM:MRL), which is also listed on AIM and only slightly bigger in terms of market cap, has made an approach regarding a possible 530p-a-share offer for the business, valuing Restore at GBP743mln.

The offer comprises 71p in cash and the rest in new Marlowe shares. The precise terms will be set if a firm bid is made

This is apparently the second approach from Marlowe, with the first towards the end of June pitched at 515p a share and smartly rejected.

And it has not taken long for Restore to dismiss the new deal as well.

Marlowe chief executive Alex Dacre was extolling the benefits of the move, saying: “We believe the combination of Marlowe and Restore is strategically compelling and will deliver value for all shareholders.

“Marlowe and Restore share the same corporate DNA and channels to market, and we believe that bringing our businesses together will create a leading business-critical services group delivering a comprehensive range of services and software, spanning the compliance and information management sectors, with an addressable market of GBP9bn.

“Combining Marlowe and Restore represents a transformational opportunity for our customers and shareholders, reinvigorating the Restore strategy and shareholder returns, deepening and broadening our service offering, and creating a business of scale that will deliver significant further growth.”

Restore however do not see it like that.

It said the first bid significantly undervalued the company and its prospects, and the second was not really a material improvement.

And it added: “The board remains highly confident in Restore’s standalone prospects through its clearly articulated strategy to generate significant shareholder value through sustained organic growth, material margin improvement through scale, synergy and operational efficiency and the substantial acquisition opportunities that exist in the markets in which it operates. The board does not believe that the combination of Marlowe and Restore is strategically compelling.”

In the market Restore’s shares have jumped 65p or 15.48% to 485p.

Since this is well below the Marlowe offer, it appears the market believes the bid might succeed.

Marlowe shares meanwhile have dipped 4p to 860p.


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