Private Equity hawks circling another London-listed company

Private Equity hawks are circling yet another London-listed company as Britain’s pandemic plundering continues. 

Sanne Group received a £1.3billion offer from Cinven earlier this month, which it quietly rejected on Wednesday. 

Revealing its approach to the stock market yesterday, London-based Cinven said it was now ‘considering its position’. 

Standing firm: Sanne Group received a £1.3billion offer from Cinven, which it quietly rejected

Cinven’s pursuit of Sanne, which provides administrative services to the likes of fund managers and hedge funds, marks the fourth approach by a private equity firm for a major British company in less than a fortnight. 

UDG Healthcare revealed this week that it had agreed a deal with US firm Clayton Dubilier & Rice, which will pay £2.6billion for the FTSE 250. 

Property developer St Modwen received a £1.2billion offer from US giant Blackstone last week, which it said the board would be ‘willing to recommend’ to shareholders if the bid was formalised. And John Laing saw its shares surge after confirming that it was in early stage talks with private equity titan KKR. 

Cinven, which is now taking stock before it makes its next move for Sanne, could decide to raise its offer from the 830p per share price it initially suggested – or walk away altogether. 

But Nicholas Hyett, an equity analyst at Hargreaves Lansdown, said Cinven’s approach for Sanne was a sign that the UK could turn into a feeding frenzy of private equity deals. 

He added: ‘There have been rumblings that the UK could be on the brink of a deal-making wave for a while, with uncertainty around Brexit lifting and valuations still depressed compared to American peers. 

‘The offer from Cinven represents a healthy 38 per cent premium to the closing price on Thursday night, and might usually have been seen as pretty tempting. However, the shares were trading at that price on the market four years ago and the board clearly thinks the business is worth more.’ 

But investors were less sure – shares were trading below the offer price yesterday, at 731p, meaning some are still worried that Cinven might walk away. 

Private equity firms specialise in buying businesses and selling them on after five to 10 years for a profit. 

The latest offers follow a surge of activity during the pandemic. TDR Capital and I Squared Capital won enough shareholder support to go ahead with their £2.3billion takeover of temporary power generator firm Aggreko. 

And Allied Universal, the North American security business backed by private equity firm Warburg Pincus, clinched the £3.8billion takeover of G4S.