Entrepreneur Matthew Riley plans £500m bid to take Daisy Group private

Founder's bid backed by Toscafund to take company off AIM after five years on London Stock Exchange’s junior slope

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  • Ryan Platt

Class of 2007 Young Gun Matthew Riley has raised £500m to take his leading communications business Daisy Group Plc private once again and de-list it from the Alternative Investment Market (AIM).

Founded in 1991 by chief executive Riley, the Daisy Group started as a provider of communications equipment and services to small businesses, and has since grown into one of the leading companies in the sector.
 
Having seen the business grow revenues to £500m and strike 24 partial or full acquisition deals Riley has decided it is time to return the business to private status. Riley originally listed Daisy on AIM in 2009 in a reverse takeover. He reversed Daisy into telecoms company Freedom4 with the latter acquiring Daisy for £81m as well as another business Vialtus for £42m.
 
The takeover and name change to Daisy Group Plc saw the enlarged company valued at £204m on the market.  
 
Since then, the business' market value has more than doubled to £466.5m as it has continued its strong growth, with the proposed takeover set to consolidate this valuation.
 
Riley currently owns a 23% stake in the group with takeover consortium partner Toscafund owning 28.5%. The group are putting together a bid of 190p a share to de-list the company from AIM and take it private once more.
 
Shares in Daisy rose 9.7% on the news to 192p a share, although a formal bid is yet to be submitted – the Group confirmed it “received an approach” on 27 July from Toscafund, allowing talks over a sale to begin.
 
Under the UK takeover code, the consortium now has to make a formal offer by 10 September if a deal is to go ahead.
 
For a deal to take place, Riley's consortium has to acquire 75% of the firm's remaining shares and allow minority shareholders to retain their stake, or purchase 90% and buy out the remaining shareholders for a complete takeover.
 
The motivation for the proposed £500m deal move is unclear, although Matthew Riley told the Channel Register last weekhe planned to make Daisy into a “mid-market tech powerhouse”. ​
Ryan Platt

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