Marketing technology company System1 has rejected a £43.1m cash-and-share proposal from its largest shareholder, Brave Bison, arguing the offer undervalues its business.

Brave Bison, which bought a 28% stake in System1 March to become its largest shareholder, said the combination would create "AIM's challenger marketing data and technology company" with pro-forma net revenue of £79m and adjusted earnings of £14m.

The digital marketing and technology company, which has a market value of roughly £100m and is listed on London's AIM market, argued that the enlarged business would combine marketing effectiveness, marketing training and digital marketing services, while benefiting from greater recurring platform revenue, AI capabilities and potential cost savings.

It added that the enlarged group would be "well placed to accelerate product development, attract and retain world-class talent, and compete aggressively" as AI reshapes the marketing technology sector. Its clients include brands such as New Balance, Primark and the PGA Tour.

The proposed offer comprises 68 pence in cash and 2.7553 new Brave Bison shares for each System1 share, valuing the company at £3.27 a share based on Brave Bison's 20-day volume-weighted average share price. Brave Bison said the proposal represents a 65% premium to System1's undisturbed share price before it disclosed its strategic investment in March.

System1, however, has rejected both Brave Bison's original all-share proposal and its revised cash-and-share proposal.

The company acknowledged the strategic rationale for a combination, but said the revised proposal "materially undervalues System1" and "does not include any notable premium for control". The board also stressed that the offer failed to reflect the company's strong trading momentum, pointing to its recent record second-half revenue, increased final dividend and positive outlook for FY27. It also clarified that Brave Bison's proposed management structure, including a leadership role for System1 CEO James Gregory, had not been agreed.

Under the UK takeover code, Brave Bison has until 7 August to announce a firm intention to make an improved offer or confirm it does not intend to proceed.

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