Asset management services provider Sanne Group rejected buyout firm Cinven’s 1.35-billion-pound ($1.90 billion) proposal as too low, the London-listed company said on Friday, expressing no interest in further engagement with the fund.
Shares in the FTSE 250 company jumped as much as 27% to 766 pence, lower than the 830 pence per share proposal.
The unsolicited proposal is the third in recent months, Sanne said. It comes at a hefty premium of about 38% to Sanne’s last closing price.
“The board engaged with Cinven to explain why the proposal significantly undervalues the Company and why it does not merit further engagement,” Sanne said in a statement, adding that it is confident of its standalone prospects.
Hargreaves Lansdown analyst Nicholas Hyett said shares trading below the offer price indicates that “investors think there’s a strong chance Cinven will walk away from the deal without improving its offer.”
Jersey-based Sanne, which provides outsourcing services to clients in dozens of countries, last year recorded a 12% increase in annual earnings to 48 million pounds as it won new businesses and made several acquisitions.
Cinven, whose investments are focussed in North America and Europe, said it was considering its options. It has until June 11 to make a firm offer or walk away.
The alternative asset and corporate services provider became the latest UK-listed takeover target by a private equity firm, as a list of companies this year have attracted bids.
UK-listed companies continue to carry a “stubborn” valuation discount to global peers, analysts at Panmure Gordon said, which they said had triggered mergers and acquisition deals worth more than 42 billion pounds this year.
Cinven said its proposal also allowed eligible Sanne shareholders to retain the right to collect the company’s final dividend declared in March.
Sanne employs more than 1,900 people globally and has a client roster of nearly 2,000 varying in type from private debt to capital markets and real estate.
Source: Reuters.com