E-Rewards makes takeover approach for Research Now

Talks “may or may not lead to an offer being made” for Research Now’s entire share capital, at a price of “not less than 430 pence in cash per share”, valuing the business at around £77m.

This price would represent a a premium of 30.3% on the closing price of Research Now’s shares on 4 September, the last business day before e-Rewards sent its indicative offer to the agency’s board of directors. The price would also represent a premium of 46.7% on the average closing price of Research Now shares in the 12 months up to 20 October 2009, which was 293 pence per share.

Research Now has told its shareholders that “due to the cash nature and value of the offer, it is in the interests of shareholders and other stakeholders to facilitate further discussions with e-Rewards”.

In a joint statement, the companies said: “The boards of Research Now and e-Rewards believe that a combination of their businesses would bring significant benefits to clients and employees of both companies.”

Research Now reported a 24% rise in revenue to £23.6m for the six months ending 30 April 2009, while revenue for the year ending 31 October 2008 was up 60% to £41.2m.

At the time, Research Now CEO Chris Havemann (pictured) told Research that there was still plenty of growth to be achieved in its operating markets. “We’ve barely scratched the surface of the Asian markets and even in many markets in Europe the transition to online is still quite early,” he said. “We’ve invested a lot in geographic expansion and that will continue to bear fruit for several years.”

News of e-Rewards’ approach for Research Now follows rival Toluna’s $40m acquisition of Greenfield Online and Ciao Surveys in the summer, while e-Rewards’ coffers were bolstered last year by a $60m investment from private equity firm TA Associates.