MWB Group this week received a one-month extension to its £52m bid for Business Exchange, while fielding stinging criticism from shareholder Pyrrho Investments.
Business Exchange gave the group, led by Richard Balfour-Lynn, until 14 November to announce a firm intention to buy the serviced office division. The extension allows Business Exchange more time to clarify MWB’s proposal and consult with minority shareholders.
Separately, MWB won support at an extraordinary general meeting on Tuesday for the £285.5m refinancing of the Malmaison and Hotel du Vin group. This debt is key to its proposed takeover of Business Exchange, in which it owns 72.3% stake.
The approval came despite 24.4% shareholder Pyrrho Investments voting against the proposals after director Paul Cummins expressed “deep concern” about the terms of the “hugely expensive debt financing” in an open letter to MWB group directors.
Cummins claimed the terms of the refinancing represented “a significant transfer of value in the company from the shareholders to your banks and to RBSM Investments”, which owns the final 17.5% of Malmaison.
He also questioned why MWB had chosen the debt refinancing and sale and leaseback when “there may have been less expensive options at hand”.
Cummins said Pyrrho was willing to underwrite an equity raising for MWB, and formally requested a seat on the company’s board.
Pretax losses at MWB Group rose to £29.2m in the 18 months ended 30 June, up from £14.2m in 2010.
