(Alliance News) - Sanne Group PLC, after the London market close on Wednesday, said it has come to an agreement with Apex Group Ltd, potentially bringing to an end a tense bidding war.
Apex has been battling with Cinven Ltd for the signature of Sanne, and finally came to an agreement at 920 pence per share - a figure which was put forward by Apex in early August.
The 920p deal values Sanne's entire issued share capital at GBP1.51 billion.
Shares in Sanne, a FTSE 250-listed asset management services provider, closed at 932.33p in London on Wednesday, but was trading at 603p the day before Cinven's first offer back in May.
Sanne's shares have more than quadrupled since the company's 2015 initial public offering at 200p.
Speaking to Alliance News on Wednesday, Apex Founder & Chief Executive Peter Hughes said the deal represents a "strong strategic fit" to combine the businesses, believing ​Sanne's clients cover a "really high quality base," and noted it is an "ideal compliment" to Apex.
Hughes said Sanne is a company he has been "following for a long time" and pointed to its "good reputation" and "great management team" as to why his company was so eager to get a deal over the finishing line.
"Sanne is extremely complementary to the business we've built at Apex," Hughes added. He also pointed to the "complementary jurisdictions" of Sanne's client base that Apex does not currently have.
Turning to the price that was able to seal the deal, Hughes said it was a "competitive process" but said to be "compelling" they had to be "well ahead" of the competing bidder.
Sanne entered talks with private equity firm Cinven over a 875p offer in June, after rejecting a string of lower offers.
Sanne has rejected four previous unsolicited offers from Cinven. Most recently, in May, it rejected an 850p per share offer.
A previous offer in May of 830p per share was rejected by Sanne as significantly undervaluing the company as the economy recovered and called the approach "opportunistic". Sanne noted that as a stand alone company it benefits from high margins, unique technology and high demand for its services.
Apex's Hughes said the Sanne board have been "very clear" in what they expected from Apex during the back and forth bidding process, with Hughes noting his firm has "delivered as it promised it would", which has been "well received" by Sanne.
He also noted Sanne is "keen for this to come to a conclusion," noting it can be "distracting".
Asked if he feels Sanne's shareholders should heed the Sanne board's unanimous recommendation of his firm's takeover bid, Hughes said Apex's offer is "really compelling".
Looking to the future, Apex is looking to combine with Sanne "to be a market leader," believing the combined business is "strategically, a really good alignment".
In a statement on Wednesday, Sanne Chair Rupert Robson said: "Sanne has a bright future ahead of it as a leader in its industry, which is entirely due to the tremendous effort of the management team and employees of the business over the past several years for which the board of Sanne would like to express their gratitude.
"Sanne has delivered substantial value creation to its shareholders since IPO and today's acquisition ensures that our investors are compensated for the future potential of the business, at what we believe is a compelling 28.8x EV/EBITDA and 40.7x P/E for 2020."
Cinven has until the end of August to either announce a firm offer for Sanne or walk away.
By Paul McGowan; paulmcgowan@alliancenews.com
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