Work Group shares suspended as it heads towards reverse takeover

Work Group updated the market on its progress in finding a suitable acquisition to fulfil its stated investment strategy on Friday.

The AIM-traded firm’s chairman said it entered into a memorandum of understanding on an opportunity for the potential acquisition of a group of companies in the business services sector, and that extensive due diligence had been on-going for some time.

“In the course of this year we reviewed a number of opportunities in order to achieve a satisfactory outcome for shareholders.

“However, the transaction on which we are now engaged is, in the opinion of the board, the one we expect will deliver the greatest value for shareholders along with the prospect of investing in a business capable of scaling into a sizeable business.”

Such an acquisition would constitute a reverse takeover under the AIM Rules for Companies, and so would require the publication of an AIM admission document and approval of shareholders in a general meeting.

Work Group said that while the process had been underway for some time, it was now clear that the admission document setting out details of the acquisition and to obtain shareholder approval for the acquisition will not be published before February.

It would therefore fall after the date on which the company is required to implement its investing strategy - 30 December.

As a result, the board requested an immediate suspension of trading in its shares on AIM until such time as it has published the admission document and completed the reverse takeover.

Work Group said it was targeting completion of the reverse takeover to take place as soon as possible in the first quarter of 2017.