Top ten firm RSM Tenon has gone into administration after breaching its banking covenant and the group's trading entities are to be bought by Baker Tilly within the next two weeks.

An announcement from the London Stock Exchange (LSE) confirmed that Matt Smith, Nick Edwards and Clare Boardman of Deloitte have been appointed joint administrators to RSM Tenon. They have also been appointed to Premier Strategies Ltd, a subsidiary entity which historically provided tax advice, but ceased selling new business in March 2012.

Matt Smith, joint administrator and restructuring services partner at Deloitte, said: 'Immediately following our appointment, a sale of RSM Tenon Group plc's trading subsidiaries to Baker Tilly was agreed and is expected to complete within two weeks, following regulatory and internal approval at Baker Tilly, which we are advised is a formality.'

Under the terms of the proposed sale, which is expected to preserve all 2,300 jobs in the group, Baker Tilly will acquire RSM Tenon Ltd, RSM Tenon Investment Solutions Ltd, RSM Tenon Financial Management Ltd, RSM Corporate Transactions Ltd, and RSM Tenon Corporate Finance Ltd. The acquisition would bring the total staff numbers to around 4,400, more than BDO or Grant Thornton.

These trading entities and certain non-trading subsidiary companies remain outside of any insolvency process and will continue to operate as usual.

When the LSE opened for business this morning, Baker Tilly released a statement saying it was not going ahead with a possible shares-based bid for the company, which it had announced it was considering in late July.

Lloyds Banking Group, RSM Tenon's sole source of lending, then told the company it was in danger of breaching its banking covenants and the bank was not prepared to grant a covenant waiver. In the absence of any other available facilities, RMS Tenon's board said that 'the appointment of administrators was the most appropriate course of action'.

RSM Tenon statement says hat the sale agreed by the joint administrators will realise no value for the ordinary shares of the company, which has net borrowings of around £80m. The terms of the sale agreement mean that Lloyds will not recover its secured debt in full.

Smith said: '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'.

Trading in RSM Tenon Group plc's shares on the LSE has been suspended in light of the administrators' appointment, and it is likely to be de-listed.