Investment vehicle Pension SuperFund Capital has lowered its offer for SIPP provider STM Group from 70p per share to 67p per share.

The revised offer follows two extensions to negotiations following the initial expression of interest in July.

The new offer is about 5% lower than the previous offer and implies Pension SuperFund will pay around £39m rather than £41m.

The deal has yet to be concluded and negotiations have been extended for a third time to 8 September.

The revised offer is conditional on the sale of “parts of the group that are non-core to the strategy of Pension SuperFund” to STM CEO Alan Kentish.

STM Group's board says it has reached agreement in principle on revised key terms of the possible offer. The revised offer is set to be a cash offer for the entire issued and to be issued share capital of the company at 67p per share.  

As a result of the revised offer, STM Group CEO Alan Kentish has signed heads of terms with STM Group and Pension SuperFund Capital to acquire parts of the group, comprising the UK SIPP businesses and the businesses connected with and including the Master Trust. The acquisition would be conditional on regulatory approval and the revised possible offer completing. 

Because of the potential sale of part of the group and Mr Kentish's interest in it, an independent committee of the board of STM Group, comprising Nigel Birrell, Peter Smith and Therese Neish has been formed to consider the revised possible offer and the proposed disposal. The Independent Committee has confirmed to Pension SuperFund Capital that, should an acceptable firm offer be made, it would be minded to recommend it unanimously to STM Group's shareholders. 

Pension SuperFund will need to make a firm offer for STM Group or leave the table before 8 September unless the deadline is extended by STM.

STM is believed to have received a number of approaches.

STM owns a number of SIPP and SSAS businesses including SIPP provider Options and has acquired the SIPP and SASS book from Mercer.

It has admitted to disappointing new business figures recently.

In its latest annual financial results published in June CEO Alan Kentish said: "Whilst we have made progress with the underlying business performance as compared to 2021, new business growth has not been at the speed or levels that I would have wanted or expected."

He said new business revenue for STM's pensions businesses, particularly in the UK SIPP market, while "steady", were below previous expectations.

The STM Group reported revenues of £24.1 million (2021: £22.4 million) in the year with profit before other items and tax of £3.3 million (2021: £2.8 million). The £1.7m increase in revenue was largely due to the acquisition of the Mercer books which contributed £0.8 million of revenue in the year, and revenue growth in its life companies of £1.5 million.

Update: story has been updated to include more details of the potential sale of parts of the group to current CEO Alan Kentish.