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Tenet shareholders in sale talks amid frustrations

Tenet shareholders in sale talks amid frustrations

A group of shareholders in independent advice firm Tenet are looking to sell their stake to a venture capitalist or American institutions amid concerns about how the company is being run.

Ian Gotts, chairman of the Tenet Shareholders Action Group which owns 6 per cent of the company, expressed dissatisfaction about the company’s recent financial performance and said moving to a restricted model could be the solution.

He said the Tenet Shareholders Action Group has approached a number of American institutions and one is currently “running the rule” over Tenet and the group’s stake in the business.

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Mr Gotts said: “We feel we should be treated well but we have had no return on our investment and the only people who have benefitted have been the providers. We get no remuneration or dividend.

“The current business model is broken and everyone is going restricted. Things have moved on and we are not moving forward.

“We have been talking to a couple of American distributors. The Americans want to come over here and generate another distribution channel but we have spoken to venture capitalists over here as well.”

Following its merger with Friends Life, Aviva is the largest single shareholder in Tenet, owning 47 per cent of the company. Standard Life and Aegon are the other two main shareholders, with 23 per cent each.

There have been reports that Old Mutual Wealth would buy Tenet but Mr Gotts expressed scepticism about this being the case.

He pointed to some of Tenet’s recent financial results, which showed the company making smaller profits from larger revenues in 2015 than it did in 2009.

According to its accounts for the year ending 30 September 2015, Tenet had a group revenue of more than £136m and made a profit of £471,952.

Meanwhile in 2009 the company had revenues of £76m and profits of £1m.

Mr Gotts said the action group had spoken to Permira in November last year but that firm then went on to invest in Towry through Tilney Bestinvest, which Permira owns.

He said: “We have spoken to people since but we cannot disclose who they are.

“We have approached an American institution which is running the rule over it but it is early stages.”

Mike O'Brien, managing director of TenetConnet and TenetSelect, said he was aware of the complaints made by the group but disagreed with them, saying the recent financial performance of the company had been good.

He said: "We increased our profit this year and we are on target to do something broadly similar again, if not better. Since 2009 there has been massive political change and the Retail Distribution Review was introduced.

"If you were to compare our performance to Financial Ltd, Honister and Sesame we are still trading in this space. If you are making a comparison it has to be relevant.

"We don't accept going restricted is the answer. If they believe they want to sell their shares, there is clearly nothing we could do to interfere with that, and nor would we wish to. There are many things we are doing to improve our efficiency going forward."