A bid for electronic invoicing platform Tungsten (TUNG:AIM) from financier Edi Truell is unlikely to be in the best interests of shareholders, according to the company's board.
Truell, who brought the company to the stock exchange and holds 15% of its shares, made an offer which would turn Tungsten into an investment vehicle holding stakes in a collection of 'disparate and illiquid' assets owned by the private equity magnate himself.
Tungsten's board says operating under this format is 'universally without merit' and would create 'distractions' to the business which would 'risk destroying value'.
Vice-chairman Truell resigned his role on Tungsten's board this morning.
'The Board of Tungsten has spent considerable time reviewing these suggestions, including the most recent proposal, and found them to date to be universally without merit for shareholders,' says a company statement.
'The Board believes it has made significant progress in addressing the challenges facing Tungsten and now believes that the group strategy as set out at Tungsten's Capital Markets Day on 9 February 2016 remains the best and most certain path to maximise the creation of shareholder value.'
Shares in Tungsten have tumbled more than 80% from above 400p a share in 2014 after slower-than-expected progress on its initiative to create an innovative lending platform linked to its existing business model of processing invoices.
Chief executive Rick Hurwitz has steadied the ship somewhat and is attempting to bring the core invoicing business into profitability by April 2017.
But there still remain question marks over the company's ability to deliver after a mixed set of half year numbers published in mid-December.
Shares in Tungsten trade 8.1% higher at 58.6p.