FST.L Share News (FST)

(Alliance News) - Audio technology firm Frontier Smart Technologies Group Ltd has received an approach from a "credible industry player", it said Friday, shortly after a major shareholder said it may make an offer.

In mid-May, Frontier and Science Group PLC failed to reach a takeover agreement, which would have seen Science Group make a 30 pence per share bid for Frontier. Frontier shares were up 23% on Friday morning at 38.89p.

Advisory firm Science Group PLC currently holds 28% of the share capital of Frontier, but, even if it takes this above 30%, will not be obliged to make an offer for the entirety of Frontier Smart's shares, as Frontier isn't subject to the UK takeover code.

However, on Friday in its own statement Science Group said: "Science Group has continued to try to engage with Frontier but no tangible progress has been made since the first letter on May 8. In the opinion of Science Group, Frontier has consistently tried to frustrate Science Group's proposal, most recently by the notification to Science Group that deal-related bonuses have been granted to the executive directors of Frontier, equivalent to six months' salary in addition to their contractual rights.

"Were Frontier subject to the UK City Code on Takeovers & Mergers, such changes to director terms of employment, which Science Group considers material in the context of a transaction of this size, could be deemed a frustrating action requiring approval of the Takeover Panel and the bidder. The Frontier board's asserted application of the principles of the Code continues to be highly selective."

Science Group also said its adviser, Panmure Gordon UK Ltd, has told it that Frontier's advisor N+1 Singer disclosed inside information to Panmure about Frontier, something which Panmure had not requested.

Science Group said it declined this information, and has not received it. It believes Frontier should make the information public to the market, and has told Frontier this, but did not receive a reply.

"The approach is at a preliminary stage, the proposed structure of the potential transaction has not yet been confirmed, and there can be no certainty that it will result in a formal offer for the company, nor as to the terms of any such offer if made," Frontier said, noting Science Group's announcement made Friday.

"The board is urgently seeking to clarify the pricing, conditionality and deliverability of this second approach, in line with its fiduciary duty to maximise value for shareholders."

Science Group shares were untraded on Friday morning, last closing at 199.00p.