Stock dropped 17.6% in yesterday’s trading

Share price fall

Shares in listed broking group Brightside dropped 17.6% in trading yesterday after it walked away from takeover talks with Markerstudy.

Brightside share price closed yesterday at 20.50p, compared with the previous day’s close of 24.88p.

Motor insurer Markerstudy launched a bid to buy Brightside in July, initially offering 27p a share and valuing the broker at £123m.

However, it cut the offer to between 20p and 22p on 6 September, following a negative trading update issued by Brightside on 31 July, which predicted a fall in new policy sales.

Brightside then refused to extend the deadline for making a firm offer, which was 5pm yesterday, to allow Markerstudy more time to secure debt funding.

The company said in a stock exchange announcement yesterday: “The board believes that a proposed offer price of between 20p-22p per share fundamentally undervalues the company and therefore sees no need in proceeding with offer discussions with Markerstudy.”

Later that day, Markerstudy issued a statement confirming that the offer talks had been terminated and re-iterating demands for explanation of a plan that would boost Brightside’s shareholder value above its offer range of between 20p and 22p.

Markerstudy, which holds an 11.4% stake n Brightside, also wants the broker to explain how it plans to address the sales slowdown detailed in its 31 July trading update.

Brightside said it will explain its strategic direction and growth initiatives in its half-year results, which are released on 18 September.