Lloyds Share Price: Booking Loss on Tenon Loans?

on Aug 23, 2013
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iNVEZZ.com Friday, August 23rd: Lloyds Banking Group (LON:LLOY) is expected to book a loss on its loans to RSM Tenon after Britain’s last accountancy firm still listed collapsed into administration yesterday.

RSM Tenon owed Lloyds ₤80.4 million before it went belly up and the accountant said that the UK bank would not recover its debt in full. “Consequently, and in the absence of any other available facilities, [Tenon] does not expect to continue to be able to meet its liabilities as they fall due,” the company said, adding that appointing administrators “was the most appropriate course of action.”

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Lloyds had previously been supportive of the firm with Tenon renegotiating its term loan facilities in
October 2012, agreeing loans of ₤93 million to the end of December 14.

Over the last few weeks RSM Tenon has been in talks with mid-market rival Baker Tilly over a possible
buy-out. In a dramatic turn of events, Baker Tilly yesterday said that it was walking away from buying Tenon’s entire share capital, prompting Lloyds to say that it was not willing to grant a covenant waiver if Tenon breached its banking facilities. Three hours later the newly appointed administrators from Deloitte immediately sold Tenon’s trading assets to Baker Tilly.

“We believe the proposed sale to Baker Tilly represents the best outcome for the RSM Tenon group. The management of the group have stabilised the business, returning it to profitability over the past 18 months and making this transaction possible to secure its future,” said Matt Smith, joint administrator at Deloitte, as quoted by The Times.
“Baker Tilly and RSM Tenon are businesses of a comparable scale operating in similar markets across the UK and internationally, and so combining our strengths and skills will provide us with new opportunities for growth, as well as further strengthening and expanding our offering to the market,” said Laurence Longe, Baker Tilly’s national managing partner.

**Analysts on Lloyds**
!m[Baker Tilly to Acquire Tenon in Dramatic Turn of Events](/uploads/story/5048/thumbs/pic1_inline.jpg)
Jefferies Group analysts yesterday lifted Lloyds share price target to 69p from 65p and reaffirmed their “buy” rating on the stock in a note to investors. Lloyds shares today are trading 0.66 percent lower at 74.20p.
Six research analysts have rated Lloyds as a “sell”, nine have given it a “hold”, advising not to trade Lloyds shares, and nineteen have assigned it a “buy” rating. The bank has a consensus rating of “hold” and a price target of 90.64p.
**As of 10.46 BST buy Lloyds shares at 74.22.**
**As of 10.46 BST buy Lloyds shares at 74.18.**

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