TT in last-ditch Prestwick rescue
Monday 24 May 1999
TT will reveal it has acceptances from 33 per cent of Prestwick's ordinary shareholders for the offer, which expired on Thursday and values the group at just pounds 700,000. It is extending the offer until 3pm this Friday.
TT's existing shareholding brings the acceptances up to 60 per cent. In its original offer posted on 29 April it said it would only declare the offer unconditional upon receiving 90 per cent approval.
Prestwick's shares were suspended at 13.5p on 27 April when the company said it had significant cashflow problems. It had been trading at a loss for several months.
After recommending TT's bid, Prestwick received other approaches, including one from US-based Circuit-Wise.
However, last Monday Circuit-Wise pulled out of talks and once again Prestwick's management strongly urged shareholders to take TT's cash.
"The board cannot guarantee that the company will be a going concern should the offers not become or be declared unconditional and it may have to cease trading immediately," it said.
TT, one of Prestwick's largest customers, has been providing emergency funds to keep the ailing Ayr-based business afloat since it made its offer.
John Newman, TT's executive chairman, is writing to Prestwick shareholders saying that the financial assistance will end if the bid is not accepted.
His letter stresses the risk that Prestwick may cease trading, warning: "If that happens it is highly likely that your Prestwick shares would be worthless."
A spokesman for the company said: "There will not be higher offer from TT. The possibility of a higher Circuit-Wise bid disrupted the time-table, so we are giving Prestwick shareholders another chance to accept. TT knows Prestwick's business and will run it well."
Ten per cent of Prestwick's shares are owned by one man, William Miller, who is thought to be opposed to TT's offer. However, TT was adamant yesterday that it would allow Prestwick to go to the wall if shareholders failed to accept in sufficient quantity by the Friday deadline.
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