Raven goes for all that glitters

In his modern offices in Knightsbridge, overlooking Hyde park, Anton Bilton has a Perspex plaque with the inscription “Raven Mount PLC acquisition of Swan Hill Group PLC via hostile public offer”, but he is quick to point out that the offer was anything but hostile. “We had acceptances from a majority of the shareholders before we made our bid. Swan Hill was trading at a large discount to Net Asset Value, and we made the owners of the company an offer” he says (but he stops short of saying “…they could not refuse”).

Raven Mount, a company associated with Bilton’s unlisted Raven Property Group PLC, made an offer on November 12, of one Raven Mount share for each Swan Hill share. Not only were the directors of Swan Hill taken by surprise, but the market was amazed that an offer of 78.5p per share that valued Swan Hill at £46.8million was been made by a shell company, Raven Mount PLC, which had only been registered at Companies House two days before and would not start trading on AIM, the Alternative Investment market, unless and until its takeover bid was successful.

In the event, the all-share offer had already been accepted by Swan Hill’s four largest institutional investors – Schroeder’s Investment Management, Silchester International Investors, UBS Global Asset Management and Jupiter Asset Management – who between them held 51.6 per cent of Swan Hill’s shares. So the offer was declared unconditional the very next day, November 13.

What the institutions and other shareholders had been offered – without any guarantees – was an uplift in the value of their shares. Although Swan Hill had declared a Net Asset Value of 130p per share in its annual report for 2002 and in its interim report to June 30, 2003, it had tried for a year to find a buyer at anything approaching that price.

In April 2003, Swan Hill’s shares had fallen to a low of 60.5p but after Raven Mount made its successful offer of 78.5p per share in November the share price rose steadily to 85p on December 17 when trading in Raven Mount shares started on AIM.

On January 22, when acceptances had risen to 92.21 per cent, Raven Mount issued notices under the Companies Act 1985 to acquire all of the remaining Swan Hill shares compulsorily.

Swan Hill’s three non-executive directors resigned and were replaced on Swan Hill’s board by the three directors of Raven Mount, Anton Bilton, Bim Sandhu (Raven Group’s Managing Director) and Glyn Hirsh (chairman of Property Fund Management PLC), but John Theakston and Colin archer remained on the board of Swan Hill. “We kept all the staff and the executive directors” explains Anton Bilton, “Swan Hill has an excellent team of building managers and land buyers”.

In February, Raven Mount’s financial advisers West LB sent out a confidential memorandum to potential buyers of the company, including information about Swan Hill’s results for the year to December 31 2003. These must have been better than expected for Raven Mount’s shares soared to 103.5p on March 8, causing the Board to make a Stock exchange announcement confirming it has entered into preliminary discussions with "various third parties" that might result in an offer being made for the entire issued share capital of Raven Mount. If an offer has not been accepted by the time you read this, Anton Bilton has a Plan 'B'. To find what plan b is click here.