A bidding war has erupted for Sanne Group after the London-listed fund administration business received a £1.5 billion takeover proposal from a rival that trumped an approach from a private equity firm.
Sanne told the stock market yesterday that it was in advanced talks about a 920p-a-share takeover by Apex Group, a competing provider of services to the financial industry.
The FTSE 250-listed group has indicated to Apex that it would recommend a deal to its shareholders should a firm offer be forthcoming. The pair are working to speed up Apex’s due diligence review, Sanne added.
If Apex makes a formal bid it would gazump Cinven, the British buyout group that has been pursuing Sanne for months.
Sanne opened discussions with Cinven in June, when the private equity firm made a fifth unsolicited bid approach of 875p-a-share.
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Under rules set by the Takeover Panel, which oversees merger and acquisition activity in Britain, Cinven has until Friday to make a firm offer or walk away from Sanne.
Shares in Sanne climbed by 64p, or 7.6 per cent, to 908p.
The battle for Sanne highlights the appeal of the fund administration industry and the wave of deal-making sweeping the London market with companies at cheap valuations because of Brexit and the Covid-19 pandemic.
Apex’s approach for Sanne came as Meggitt, the FTSE 250 aerospace and defence group, accepted a £6.3 billion takeover offer from Parker-Hannifin Corporation, the American engineer. Wm Morrison, the supermarket chain, and St Modwen, the property group, are in the middle of takeovers.
London-based Sanne was founded in Jersey in 1988 and joined the stock exchange in 2015, when it was valued at £232 million, or 200p a share. Its market capitalisation has since been boosted by demand for its services, but a profit alert in July 2019 rattled investors.
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The profit warning stemmed partly from the private client business, which it sold last year. It has more than £465 billion in assets under administration and has more than 2,000 staff.
Apex was founded in Bermuda in 2003 by Peter Hughes, who remains its chief executive.
