Lake Capital extends Engine offer window to respond to rebel shareholders concerns
Private equity firm Lake Capital has extended its offer for its proposed £100m buyout of Engine Group while it responds to concerns raised by a group of unhappy shareholders.
The group of ex-employees, understood to comprise a disparate mix of around 70 recent and old employees – some of whom left the agency up to a decade ago – have expressed anger over the terms of the offer, which stipulated they are to receive cash only, rather than shares in the new group.
All current employees have been offered shares in the new group, whereas the external shareholders, who have claimed a combined 29 per cent of Engine shares, are understood to have received an offer at a nominally lower value compared to the value of the shares being issued to employees.
This reflects the fact that the shares are not tradeable for cash, according to Engine.
Lake Capital needs 75 per cent of shareholders to agree for the acquisition to go through.
However, it is understood that Lake Capital does not want to have any ex-employees as shareholders in the new group, especially given some of them are believed to be now part of rival agencies.
An Engine spokesperson told The Drum: “Lake has extended its offer in order to listen to shareholder concerns and gather further acceptances. We remain confident that we will progress as planned in due course.”
The deadline for all shareholders to accept or reject the offer passed last night (20 August), however Lake Capital has now extended the deadline by around a week to give it time to listen to the concerns and establish how it can move forward with the deal.