13.69% Acceptance Falls Short, Ending Brave Bison’s Offer for System1
Key Facts
Brave Bison announced on 26 October that its final offer for the issued and to-be-issued shares in System1 that it did not own had lapsed after it failed to secure enough acceptances by 1 p.m. The offer received valid acceptances for 1,738,136 shares, representing about 13.69% of the issued share capital, according to the company’s announcement published through the London Stock Exchange. The total number of shares held by Brave Bison or covered by acceptances was 5,272,146, or about 41.54% of the share capital. This figure includes its existing holding, so it does not mean that holders of 41.54% accepted the offer. The company said the acceptance condition had not been met, and the offer therefore formally lapsed when the deadline expired.
The deadline for submitting acceptances was 1 p.m. on 26 October, under the offer terms. Brave Bison said the acceptances it had received were insufficient to satisfy the acceptance condition, despite including shares in System1 it already owned in the total number of relevant shares. The difference between the valid acceptances, 13.69%, and the total combining its holding and acceptances, 41.54%, shows why the result should not be described as a rejection by all shareholders. The announcement specifies how many shares were actually accepted and how many were already owned by the company; it does not attribute a unified position to the remaining shareholders. The process ended at the stated deadline without the condition being met.
The final offer comprised 180 pence in cash for each System1 share, plus 2.394 new Brave Bison shares and one contingent value right for each share. The right could have enabled a cash payment of 20 pence, subject to its conditions being met. Brave Bison presented the offer as an attempt to acquire the entire issued and to-be-issued share capital in System1 that it did not already own. The company said System1’s consumer emotional response measurement platform could become central to the creation and approval of advertising campaigns, alongside advertisers’ AI-powered marketing systems. The consideration combined cash, shares and a contingent right, while the two parties’ disagreement focused on the company’s value and its shareholders’ interests.
System1’s board opposed the final offer and the alternative offer, unanimously recommending that shareholders reject both, saying the consideration “significantly undervalues System1 and is not in shareholders’ interests.” In a separate statement, the company said shareholders holding 31.4% of the ordinary share capital had informed it in writing that they intended to vote against the offer, including three of the four largest shareholders. System1’s board valued the final offer at 360.75 pence per share, excluding the contingent value right, using Brave Bison’s closing share price on 6 October. It said this represented a premium of only 6.1% to System1’s closing share price of 340 pence on the same date. The valuation reflects the core disagreement: Brave Bison offered a combination of cash, shares and a contingent right, while System1’s board considered that the total value did not reflect what the company was worth.
System1 based its case on improving operating profits in the five months ended August. Adjusted profit before tax was £2.1 million, compared with £0.3 million in the same period a year earlier, while gross profit margin was 87% in both periods. The company’s board said it was “highly confident in a successful independent future for System1” and reiterated its recommendation that shareholders reject the offer and take no action in respect of their shares. Brave Bison’s chief executive said he was disappointed that the offer had lapsed, but described the company’s investment in System1 as strategic and pointed to its potential. He added that Brave Bison looked forward to working with System1’s board to maximise shareholder value.
With the offer lapsed, shareholders’ acceptances are no longer binding, and paper share documents will be returned within seven days. Brave Bison is subject to Rule 35.1 of the Takeover Code, with specified exceptions allowing it to make a subsequent offer with the Panel’s consent. As for the next step, System1 expected to publish its interim results for financial year 2027 in early December. Those results will be the next announced near-term opportunity to update investors on the company’s performance following the takeover attempt. Until then, the board’s published position remains that it prefers an independent future and rejects the offer that has lapsed.