The deadline for Baker Tilly to finalise a deal or withdraw its offer on troubled top 10 accountancy firm RSM Tenon falls due tomorrow (22 August 2013).

For regulatory reasons as a listed company, RSM Tenon had to announce that possible takeover talks were going on, which in other circumstances would not have become public knowledge at such an early stage.

According to documents lodged with the London Stock Exchange (LSE), John White, the managing director of RSM Tenon Financial Management, upped his holding to 880,665 shares on 19 August. Partner and head of restructuring, Chris Ratten, also increased his shareholding by the same level - 7,043 Employee Purchase Shares and 1,410 Matching shares to take his total to 122,369.

RSM Tenon shares are currently trading at £1.10 - a dramatic fall from previous highs in November 2012 when they were just shy of £8 at £7.80.

The possible acquisition follows the merger earlier this year of BDO and PKF which industry commentators intimated would be the first of a number of significant mergers across the profession.

In its last interim financial statement for the six months to February 2013, the firm had net borrowings of £80.4m compared to total facilities of £93.0m at 31 December 2012 (2011 £76.5m), with an underlying operating loss of £0.6m (compared with £10.9m in 2011). The firm's annual results are due out in August, but pre-tax losses were £101.8m for the year to July 2012, down from £83m to £7.4m in the six months to 31 December 2012.

Baker Tilly is ranked ninth in the Accountancy Top 60 firms survey with annual fee income of £170m, down from £182m in 2011. In the tax and audit and accounting service lines, Baker Tilly reported slightly stronger performance than RSM Tenon in 2012; for example, tax income was £46m at Baker Tilly, £35m at RSM Tenon over 2012, while A&A fees were £77.2m and £62m respectively.