Discussions have already begun with two of the prospective bidders in the hope of getting an improvement on the existing 100p per share offer before the bid deadline on 3 November, chairman and chief executive Philip Sturrock said yesterday.
Macmillan's bid was more than double the 46p at which Cassell's shares were trading before the bid was made, but yesterday's defence document dismisses the offer from Macmillan as "derisory".
The document takes no account of the massive savings on overheads that a takeover would generate. It claims the offer also ignores the benefit to a bidder of Cassell's accumulated tax losses, which are in excess of pounds 3.3m.
Cassell's business includes an academic publishing arm and dictionaries as well as cookery books and novels by Nick Hornby, the author of Fever Pitch and High Fidelity. It also includes the Victor Gollancz titles.
Profits have been hit by the strength of sterling but Macmillan is offering only 0.31 times Cassell's annual turnover, compared with recent takeovers in the publishing world which ranged from 0.80 to 1.09 times annual turnover, and the 0.97 times multiple Cassell achieved when it sold its children's books last year. It is clear, however, from the document that Cassell is not fighting to retain its independence. It regards a takeover as inevitable and is only arguing over the price.
Cassell made an operating profit of pounds 759,000 on a turnover of pounds 23.25m last year, down by a third on the previous year, but the pounds 216,000 operating profit in the first half of the current year was less than half the loss at the same stage last year. But the board is refusing to make a profit forecast for the current year because of the importance of the second half of the year.
Macmillan bought 14.9 per cent of the shares from four fund managers immediately after its offer was made last week, and it claims acceptances for a further 15 per cent that are irrevocable provided no other offer above 110p is put on the table. It also claims informal support from holders of a further 34 per cent of the shares.Reuse content