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- šø PE Continues Raid on UK Markets
šø PE Continues Raid on UK Markets
Another large UK company a targeted by a PE bidder, Network International shares jump after CVC/Francisco Partnersā possible deal value is announced, John Wood Groupās Board cave to shareholder pressure and engage with Apollo and Page Group echoes earlier warnings over health of hiring market.
Good morning. In todayās update - another large UK company is targeted by a PE bidder, Network International shares jump after CVC/Francisco Partnersā deal value is announced, John Wood Groupās Board caved to shareholder pressure and are engaging with Apollo and Page Group echoed earlier warnings over the health of the hiring market.
Markets
Despite losing steam in the afternoon after a positive start, UK stocks ended the day marginally ahead, with the FTSE 100 and FTSE 250 closing up +0.1% and +0.2% respectively. Notable movers on the day included Network International (+19.9%), Wood Group (+6.7%) and THG (+44.9%) who all gained on deal-related news, whilst Capita (-9.5%) slumped on concerns over the recent data hack.
Barclays found itself -2.3% lower after announcing job cuts in its IB unit, whilst also coming under scrutiny regarding former CEO Jes Staleyās relationship with Jefferey Epstein.
Top Stories
š° PE bidders deploy dry powder in cheap UK markets
Apollo continued its raid on UK public markets, with eCommerce platform THG becoming the latest company to attract interest from the US giant. THG confirmed on Monday that Apollo had submitted an initial (non-binding) offer to the Board, and whilst no valuation was disclosed, shares were still bid up by markets - THG closed 44.9% higher on the day. Shareholders are likely to require a significant premium to agree a takeover - THG shares are still down 81% since its IPO in September 2020 (and down almost 90% since all time highs in January 2021).
Network International confirmed it had received a non-binding proposal from CVC/Francisco Partners at 387p (a tidy 60% premium to the pre-deal price). The Board of Network gave its approval, saying it would be āminded to recommendā shareholders accept the deal should a firm offer be submitted.
The Board of John Wood Group also announced that, having spoken to shareholders, it was now engaging with Apollo in regards to their roughly Ā£1.7bn offer. Apollo has been given access to due diligence materials and granted an extension to the deadline needed to submit a firm offer under the UK takeover rules (to mid-May).
š© Page echoed warning over hiring markets
London-listed recruiter Page Group echoed rival Robert Walters in a bleak update to investors on the state of hiring markets. Page reported a nearly 10% drop in gross profits for Q1 amid ālower levels of candidate and client confidenceā, causing delays to hiring decisions. Symptomatic of an uncertain economic environment, the recruiter also said temporary hirings had picked up as companies looked to retain flexibility. (Official)
What Else Happened?
Economics / Politics / General
PM Rishi Sunak was in the spotlight over claims he failed to properly disclose his wifeās shareholding in a childcare company that stood to benefit from government subsidies.
Deals
The owners of roadside recovery company AA have hired Goldman Sachs to explore options around a potential stake sale; PE firms Towerbrook Capital Partners and Warburg Pincus acquired AA in 2021.
Despite making bidders jump through hoops, the Glazers are growing increasingly confident of securing the capital injection needed for them to remain majority owners of Man United.
VC deals of the day - Yonder, the London-based fintech looking to disrupt the credit card industry, raised a Ā£62.5m Series A to fund expansion into new cities; Scan.com raised a $12m Series A funding round to aid its mission of cutting waiting times for medical scans; digital cancer support clinic Perci Health raised Ā£3.4m.
Company News / Trading Updates
Listed outsourcer Capita sunk 9.5% in trading after warning markets that the recent cyber attack by Russian hackers was worse than expected; personal details including bank accounts details, addresses and passport photos are reportedly being sold online.
Shares in Royal Mail owner IDS jumped 6.7% as investors reacted positively to the pay agreement reached over the weekend.
No surprise given its recent activity in UK takeovers - Apollo opened a new European HQ in central London, with Head of Europe Rob Seminara claiming the firm has āmore capital to deploy than everā.
FTSE 100 insurer Aviva committed Ā£150m extra to its VC arm to invest in āpromising young digital and tech firmsā.
š Global Snapshot
Japanese gaming giant Sega launched a ā¬706m offer for Angry Birds owner Rovio, five years after it IPOād at nearly ā¬900m.
Apple is teaming up with Goldman Sachs to provide a retail bank account paying 4.15% interest.
Alphabet investors were spooked by news that Samsung was considering replacing Google with Bing as its default search engine on devices - shares dropped 2.8%.
Following the collapse of plans to spin off its consulting unit, EY is set to cull 3,000 jobs in the US, amounting to 5% of the workforce in the country.
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