Anexo – another delisting on the cheap?

Anexo Group: Analysis of the 60p Bid and Investor Reaction 

Following the 22nd July 2025 announcement of a takeover offer for Anexo Group plc, this blog provides an analysis of the offer terms, a summary of the public reaction from individual investors, my personal concerns on pricing and a suggestion of possible activist actions.  

Please note I am not qualified to give financial advice and nothing in this blog should be construed as advice. Do your own research. 

 1. The Offer: A 60p Price with a Complex Structure

The offer from Bidco (an entity controlled by DBAY and the company’s founders) values Anexo at 60p per share. However, it is critical to understand that this is not a straightforward cash bid. The deal is structured to give minority shareholders two main options: 

• A Partial Cash Exit: A Tender Offer allows shareholders to sell a guaranteed minimum of 46.47% of their holding for 60p per share in cash. 

• A Paper Rollover: For all remaining shares, shareholders will receive 60p per share in the form of illiquid, unsecured loan notes with a five-year maturity. These loan notes are highly illiquid, cannot be easily sold, and pay no cash interest for up to five years (the 15% interest accrues and is paid on redemption). There is also an “Alternative Offer” to receive non-voting shares in the new private company, which are equally illiquid. 

The bidders, who already control ~63% of the company, have confirmed their intention to delist Anexo from the AIM market, which will remove all public trading facilities for the shares.

 2. Shareholder Reaction: Widespread Anger and Frustration

A review of public investor forums, including the LSE and ADVFN bulletin boards, shows a near-unanimous feeling of outrage and betrayal among minority shareholders. The sentiment is overwhelmingly negative, with key themes emerging: 

• Outrage at the price: The 60p price is widely seen as a “take-under” or “theft,” in light of the historically low share price and the indicative 2021 offer from DBAY at 150p. One user on the LSE bulletin board described it as “a complete and utter stitch-up,” a sentiment echoed by many others. 
• Anger at the independent directors: There is profound anger directed at the independent directors for recommending an offer that their own independent financial adviser, Grant Thornton, “does not consider… to be fair and reasonable.” This is seen as a complete failure of corporate governance.
• Feeling trapped: Investors recognise that with the bidders holding an unassailable 63% stake and forcing through the delisting, they are trapped with no good options. 
• Unattractive options: The loan notes and alternative shares are viewed as “monopoly money”—illiquid, high-risk instruments designed to benefit the bidders while offering little security or value to minorities. 
• Inadequate cash exit: The partial cash tender offer is seen as a “crumb from the table,” an insufficient concession designed to give the appearance of fairness while the bidders secure the company’s assets on the cheap.

3. Offer Price Analysis: Justified or Opportunistic?

This year, Anexo was trading around 60p to 70p and then dropped to 52p on 22 July 2025 (see for example https://fiscal.ai/company/AIM-ANX/). 

The shares were trading at around £1.40 in 2021 and in June 2021 DBAY advisors announced a potential cash at 150 pence per share. This was withdrawn in August 2021. 

The shares were trading at around 100p in early 2023, and in April 2023 DBAY advisors again expressed interest, although no Rule 2.7 offer was made. Market speculation focused on a potential offer price in the 80p / 100p range. 

How Has Anexo’s Financial Performance Been Since the First Offer? 

This is the critical question. The past few years have been challenging for the company, which largely explains the share price decline and the lower offer price. The key issues are not with revenue, but with profitability and, most importantly, cash flow and debt. 

Here’s a summary of the company’s performance based on its published results for the full year 2024 (released in Spring 2025): 

 1. Revenue growth (the positive): Top-line revenue has continued to grow. The business is still successfully acquiring new cases for its legal services division (Bond Turner) and growing its credit hire vehicle fleet. This indicates that the core business engine is still running well. 

 2. Profitability pressure (the concern): While revenue grew, profit before tax (PBT) fell. In its most recent annual report, the company reported a decline in profit before tax compared to the previous year.  This was attributed to inflationary pressures on fixed costs and the significant investment required to pursue new cases within the VW emissions litigation portfolio. 

• Financial year 2023: PBT was £28.1 million. 
• Financial year 2024: PBT fell to £21.7 million. 

This represents a significant year-in-year decline of £6.4 million, or nearly 23%, and provides a clear reason for a bidder to argue for a lower valuation.  

 3. Rising net debt and problematic cash flow (the major issue): Anexo’s business model requires a huge amount of cash to fund car credit hire and the costs of litigation before cases are settled.
Net debt is a crucial metric for Anexo as it uses debt to fund its cases and vehicle fleet.  

• As of 31 December 2023: Net debt stood at £67.5 million. 
• As of 31 December 2024: Net debt had risen to £81.4 million. 

This represents an increase of £13.9 million, or over 20%, in just twelve months.  

a. Slow cash conversion: The company has seen a slowdown in the time it takes to receive cash from settled cases, a theme across the sector.
b. Investment in VW cases: Pursuing the potentially lucrative VW emissions claims requires substantial upfront cash. 

This combination has led to a significant increase in the company’s net debt. The market is concerned about this rising debt level and the strain it places on the balance sheet. 

From a bidder’s perspective, they are inheriting a much larger debt pile, which increases the risk profile of the business and potentially justifies a lower equity price. 

Is the Price Justified or an Opportunistic Grab?

It appears to be a mixture of both. 

The argument for the price being justified: The bidders can try to justify the 60% offer price reduction from 150p to 60p. Since their withdrawn offer in mid 2021 and their potential offer of mid 2023, Anexo’s financial profile has become steadily riskier: 

• Profits have declined. 

• Net debt has risen substantially. 

• The time it takes to turn cases into cash has lengthened. 

From a bidder’s perspective, they are now looking to take on a company with a more strained balance sheet. A lower price reflects this increased financial risk.  

The offer is broadly consistent with the recent open market price of the shares.  

The argument for the bid being an “opportunistic grab”: This is a very strong argument. DBAY, as the largest shareholder and an insider, has an intimate understanding of the company’s operations. 

• Timing is key: They are making their move when the company’s cash flow is at a point of maximum strain and market sentiment is low. They are bidding before the massive investment in the VW emissions cases begins to turn into highly profitable cash settlements. 

• Capturing the upside: If the VW litigation is successful over the next 1-3 years, it could lead to a huge influx of cash and profit for Anexo. By taking the company private now at 60p DBAY and its partners would capture all of this future upside, while current shareholders would miss out. 

• Underlying business is intact: The fact that revenues are still growing proves the business model is not broken. The current issues are primarily related to the timing of cash flows, not a fundamental collapse in operations. 

Because this is a voluntary offer, it can be priced freely and rule 6.1 of the Takeover Code is not triggered. There is an argument that DBAY should show goodwill (and defend itself against shareholder criticism) by voluntarily adhering to this rule by offering at least the highest price paid for shares in the 12 months prior to the offer.   

At a price of 60p, the argument that this is an overwhelmingly opportunistic grab becomes undeniable (according to my AI agent Gemini). 

• The independent advice: The most damning evidence comes from the RNS itself. Grant Thornton, the official financial adviser, has advised that the offer is not fair and reasonable. They specifically note that it “does not give any consideration to the potential upside” from the valuable diesel emissions litigation claims. It is highly unusual for a board to recommend an offer against such advice. 

• The value proposition: While Anexo has faced cash flow headwinds, a 60% reduction from the previous 150p offer seems entirely disproportionate. The bidders are using the company’s short-term (and largely self-created) cash constraints to seize the significant long-term value of the litigation portfolio for themselves. 

• The structure: The deal is structured to consolidate the bidders’ control (but without paying a bid premium for 100% control) while pushing all the risk onto minority shareholders who accept the paper offers. Forcing shareholders to swap liquid, quoted shares for illiquid, unlisted debt in a private entity is a classic squeeze-out tactic. 

In conclusion, the 60p offer appears to be a masterclass in opportunism, using inside knowledge and a controlling stake to take a company private at a price its own adviser cannot endorse, leaving minority shareholders justifiably furious. 

I would like to see a considerably better offer. Sadly, the Anexo independent directors have already approved the deal, so the chances of a U-turn from them are slim.

Readers may recall the Gusbourne case which had some similar characteristics, see https://www.sharesoc.org/blog/education/gusbourne-case-study/ where shareholders were arguably dealt with even more unfairly. 

This blog is written by Cliff Weight, a long-term shareholder in Anexo.  

Cliff is a member of ShareSoc and the ShareSoc Education and Policy Committees.  

Further Background

The RNS notes: 

“The Independent Anexo Directors have considered the advice from Grant Thornton in connection with the financial terms of the Tender Offer and the Takeover Offer. It is noted that the Offer Price falls within a range of comparable multiples identified by Grant Thornton. The Independent Anexo Directors have also considered in detail Grant Thornton’s comments on the potential upside of the diesel emission litigation claims.” 

“Grant Thornton UK Advisory & Tax LLP (“Grant Thornton”) which is authorised and regulated by the Financial Conduct Authority in the UK, is acting exclusively for Anexo and no one else in connection with the matters described in this Announcement and will not be responsible to anyone other than Anexo for providing the protections afforded to clients of Grant Thornton nor for providing advice in connection with the matters referred to herein. Neither Grant Thornton nor any of its subsidiaries, branches or affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Grant Thornton in connection with this Announcement, any statement contained herein, any offer or otherwise. Apart from the responsibilities and liabilities, if any, which may be imposed on Grant Thornton by the Financial Services and Markets Act 2000, or the regulatory regime established thereunder, or under the regulatory regime of any jurisdiction where exclusion of liability under the relevant regulatory regime would be illegal, void or unenforceable, neither Grant Thornton nor any of its affiliates accepts any responsibility or liability whatsoever for the contents of this Announcement, and no representation, express or implied, is made by it, or purported to be made on its behalf, in relation to the contents of this Announcement, including its accuracy, completeness or verification of any other statement made or purported to be made by it, or on its behalf, in connection with Anexo or the matters described in this Announcement. To the fullest extent permitted by applicable law, Grant Thornton and its affiliates accordingly disclaim all and any responsibility or liability whether arising in tort, contract or otherwise (save as referred to above) which they might otherwise have in respect of this Announcement, or any statement contained herein.” 

Below is the full text of the opinion given by Grant Thornton, the Independent Financial Adviser, regarding the Anexo takeover offer. It is important to read this in conjunction with the board’s response, which I have also included immediately after for full context. 

Full Text of Grant Thornton’s Opinion 

Here is the complete text from paragraph 6 of the announcement, detailing the adviser’s view: 

6. View of the Company’s independent financial adviser with regard to the financial terms of the Tender Offer and the Takeover Offer

The Independent Anexo Directors have received advice from Grant Thornton in connection with the financial terms of the Tender Offer and the Takeover Offer. In providing its advice, Grant Thornton has taken into account the commercial assessments of the Independent Anexo Directors. 

The Tender Offer 

Grant Thornton notes that although the Offer Price (which is the same for both Tender Offer and Takeover Offer) implies an earnings multiple which falls within a range of multiples observed in companies and transactions identified as being broadly comparable to the constituent parts of the Wider Anexo Group (whilst acknowledging the limited availability of directly comparable and relevant companies and transactions, particularly in relation to the Wider Anexo Group’s credit hire activities), the Offer Price does not give any consideration to the potential upside that could be realised if the Company successfully delivers the potentially material, albeit uncertain returns associated with the Wider Anexo Group’s investment into diesel emission litigation claims. 

A favourable settlement of the diesel emission litigation claims would be expected to enhance the Company’s revenue, profitability and cashflows although the certainty, quantum and timing of any negotiations or court settlement, and the costs associated with pursuing the claims, remains uncertain. 

Furthermore, although the Offer Price represents a premium of 17.6 per cent to the closing price of 51 pence per Anexo Share on 17 April 2025 (being the last Business Day before the Offer Period began), it is a discount of 2.6 per cent to the Volume Weighted Average Price of 61.6 pence since the start of the Offer Period up to the Latest Practicable Date, and also a discount to longer term volume weighted averages (between 4 and 12 months) prior to the Offer Period. Consequently, Grant Thornton does not consider the financial terms of the Tender Offer to be fair and reasonable. 

Grant Thornton notes that the Tender Offer represents the only cash exit opportunity available to Anexo Shareholders under the proposals. However, the Tender Offer does represent a partial liquidity opportunity offering Anexo Shareholders (excluding the Joint Bidders) cash for up to approximately 46.47% of their holdings on a pro rata basis, which may not be achievable in the future, if at all. 

PIK Loan Notes 

In addition to the financial considerations relating to the Offer Price detailed above, Grant Thornton notes that the PIK Loan Notes, as described in paragraph 12 of this Announcement, are non-cash consideration which have no readily realisable market value as they are unlisted and non-transferable other than with the consent of Bidco. The PIK Loan Notes are inherently subject to the risks associated with illiquid and non-transferable securities, as further described in paragraph 14 of this Announcement. 

For the reasons above, together with the risk factors and other investment considerations set out in paragraph 14 of this Announcement, and the uncertainties relating to the valuation of the PIK Loan Notes, Grant Thornton is unable to advise the Independent Anexo Directors whether or not the financial terms of the Loan Note Offer are fair and reasonable. 

Consideration Shares 

In addition to the financial considerations detailed above, Grant Thornton notes that the Consideration Shares as described in paragraph 13 of this Announcement are non-cash consideration and (a) are unlisted and will not be transferrable except in limited circumstances; (b) will not carry any voting rights; (c) will only carry pre-emption rights on new issues of securities by Midco if any such issue is for cash, and such rights will be subject to other important exceptions presenting a risk of significant dilution and reduction; and (d) their future value will be uncertain as any exit will be reliant on either one or both of the Joint Bidders exiting (either by ceasing to control directly or indirectly control Topco or Topco and its affiliates ceasing to control Midco). 

For the reasons above, together with the risk factors and other investment considerations set out in paragraph 14 of this Announcement, it is not possible to provide a reasonable assessment of the present value of the Consideration Shares and Grant Thornton is unable to advise the Independent Anexo Directors whether or not the financial terms of the Alternative Offer are fair and reasonable. 

Grant Thornton reminds Anexo Shareholders to carefully consider the views of the Independent Anexo Directors set out in this Announcement, including the strategic and longer-term factors that have been considered in arriving at their recommendation.” 

The Board’s Response and Recommendation 

Here is the text from the following section, paragraph 7, where the Independent Directors explain why they are recommending the offer despite Grant Thornton’s opinion. 

7. Recommendation by Independent Anexo Directors

The Independent Anexo Directors have considered the advice from Grant Thornton in connection with the financial terms of the Tender Offer and the Takeover Offer. It is noted that the Offer Price falls within a range of comparable multiples identified by Grant Thornton. The Independent Anexo Directors have also considered in detail Grant Thornton’s comments on the potential upside of the diesel emission litigation claims. The Independent Anexo Directors emphasise that: (i) the market has been kept abreast of significant events with respect to such claims and; (ii) all the claims are within a litigation process of which a large proportion are at a very early stage, impossible to quantify and therefore the Independent Anexo  

Directors would not expect any offeror to heavily weight these claims into its offer price. The Independent Anexo Directors note that any Anexo Shareholders that accept the Alternative Offer for Consideration Shares may indirectly benefit from any potential upside from such diesel emission litigation claims. The Independent Directors note that the Offer Price is at a premium of 17.6 per cent. to the closing price of 51 pence per Anexo Share on 17 April 2025 (being the last Business Day before the Offer Period began), and a premium of 13.9 per cent to the volume weighted average price of 52.7 pence for the month ended on 17 April 2025 (being the last Business Day before the Offer Period began), 

The Independent Directors have also considered that Topco has no restrictions on buying Anexo Shares and there will be no requirement under the Takeover Code for it to make an offer for Anexo Shares in the future. Anexo Shareholders who do not take up their entitlement under the Tender Offer or accept the Offer will not have any certainty that Anexo Shares will remain admitted to trading on AIM and the Independent Directors would draw Anexo Shareholders attention to the Joint Bidders’ intention to seek, and the undertaking of Anexo to procure (subject to Anexo Shareholder approval), a de-listing (as set out paragraph 20 of this Announcement) and consequently there can be no certainty that Anexo Shares will continue to be traded. Furthermore, holders of Anexo Shares will not benefit from the exit provisions available for holders of the PIK Loan Notes or Consideration Shares in the future. 

After taking all the above into account, the Independent Anexo Directors believe that the terms of both the Tender Offer and the Takeover Offer to be fair and reasonable, and (i) recognise the medium-term risks and prospects of Anexo in its current form as a standalone, small-cap quoted entity, (ii) are in the best interests of Anexo’s stakeholders and (iii) that Anexo Shareholders should be given this opportunity to realise value. Consequently, the Independent Anexo Directors have recommended in the Circular that Anexo Shareholders vote in favour of the Tender Offer Resolution and hereby further recommend that they accept the Takeover Offer.”