A forecast upgrade has pushed System1 shares above the value of Brave Bison's hostile bid, complicating the takeover battle.
Market research group System1 (AIM: SYS1) has raised its full-year profit guidance and seen its shares climb 4.48% to 350p, a level that now sits above the value of the unsolicited takeover approach from rival Brave Bison (AIM: BBSN).
The re-rating came after System1 revealed adjusted pre-tax profit of £2.1m for the five months to August, prompting management to lift full-year guidance from £4.2m to £5m. The upgrade hands the board fresh ammunition in its defence against Brave Bison's bid, which now looks light compared with where the shares are trading.
System1 shares also went ex-dividend during the session for a final payout of 6p a share, meaning the underlying strength of the move is arguably greater than the headline percentage suggests, given holders buying today no longer qualify for that distribution.
The improved trading update is a pointed rebuttal to Brave Bison, whose approach for the market research services provider has yet to convince the target's board that the offer reflects fair value. With guidance now pointing to a full-year profit of £5m, System1's management has a stronger numerical case to make to shareholders weighing up the bid.
Attention now turns to how Brave Bison responds, and whether it revises terms to reflect System1's improved outlook. Investors will be watching for further statements from both boards as the takeover situation develops, with the market's verdict already delivered through a share price that has moved decisively above the bid value.
This report is based on System1’s announcement and coverage by UK Investor Magazine. Company announcements can be tracked via London Stock Exchange RNS and Investegate, and the full results calendar is worth watching for the next update.
This article is for general information only and does not constitute investment advice or a recommendation to buy or sell any security. Photo: Norbert Braun on Unsplash.
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