Market Tracker Trend Report: Trends in Public M&A in Q3 2020

Market Tracker Trend Report: Trends in Public M&A in Q3 2020
Lexis®PSL Corporate and Market Tracker has conducted research to examine the current trends in UK public M&A for the period 1 July  2020 to 30 September 2020.


Background and approach

Lexis®PSL Corporate and Market Tracker has conducted research to examine the current trends in respect of UK public M&A. Data for this report has been sourced from the Market Tracker transaction data analysis tool which allows users to access, analyse and compare the specific features of numerous corporate transactions. This is an update to our Market Tracker trend report—trends in UK public M&A deals in H1 2020 in which we examined firm and possible offers announced in the first half of 2020.

For the purposes of this update we analysed the period between 1 July 2020 to 30 September 2020 (Q3 2020).

We reviewed a total of 30 transactions involving Main Market and AIM companies that were subject to the Takeover Code (Code): 12 firm offers, 15 possible offers and three announcements of formal sale processes (FSPs).

The percentages included in this report have been rounded up or down to whole numbers, as appropriate. Accordingly, the percentages may not in aggregate add up to 100%.

The final date for inclusion of developments in this report is 30 September 2019. Reference has been made to developments after this date if considered noteworthy.

Deal highlights

After depressed levels of public M&A in H1 2020, deal activity increased significantly during Q3 2020. Key highlights included:

• 12 firm offers (Q1 2020: 8 firm offers; Q2 2020: 4 firm offers)

• £10.1bn aggregate deal value (Q1 2020: £2.4bn; Q2 2020: £271m)

• £839m average deal value (Q1 2020: £297m; Q2 2020: £68m)

• Four £1bn plus transactions, including GardaWorld’s £3bn hostile offer for G4S

• 75% of firm offers were public to private transactions (H1 2020: 67%)

• 58% of firm offers made by non-UK bidders (H1 2020: 50%) 

Deal volume and deal value

In our H1 2020 public M&A trend report we commented on the significant reduction in public M&A deal activity, which was widely attributed to the economic uncertainty caused by the coronavirus (COVID-19) pandemic. Q3 2020 saw a return to more normal long-term levels with 12 firm offers announced (six for AIM quoted companies and six for Main Market companies) during the period. This is equal to the number of firm offers announced during the entirety of H1 2020 (Q1 2020: 8 firm offers, Q2 2020: 4 firm offers).  

Aggregate deal value was also markedly higher in Q3 2020 at £10.1bn, almost four times the aggregate deal value for the whole of H1 2020 (£2.6 bn).

Average deal value for Q3 2020 was £839m (H1 2020: £220m). 

It will be interesting to see whether this increased deal volume and deal value represents a return to normal levels of deal activity or is a reflection of pent up demand following the pause in activity in Q2 2020.

£1 bn plus transactions:

Four (33%) of the 12 firm offers announced in Q3 2020 had deal values exceeding £1bn. The largest transaction was GardaWorld’s £3bn hostile offer for G4S. 

TargetBidderDeal valueIndustry sector (target)Consideration structureBidder nationality
G4S Garda World Securities£3bnSupport servicesCash onlyUnited States
William HillCaesars Entertainment£3bnTravel, hospitality, leisure & tourismCash onlyUnited States
Hastings Group HoldingsSampo and Rand Merchant Investment Holdings£1.7bnFinancial servicesCash onlyFinland & South Africa
Highland Gold MiningFortiana Holdings £1.1bn

Mining, metals & extraction

Cash onlyRussia[1]

[1] Fortiana Holdings is a Cyprus registered company, which is wholly owned by Vladislav Sviblov.

Deal structure

Schemes of arrangement have been the preferred choice of deal structure in recent years and accounted for 83% of firm offers in H1 2020. However, Q3 2020 saw five (42%) of the 12 firm offers structured as contractual offers, six (50%) as schemes and one (8%) as a tender offer. Two of the  transactions that were structured as contractual offers were either hostile or mandatory offers and a further two transactions that were structured as offers were made by bidders with significant stakes in the target company. These factors are likely to have influenced the choice of deal structure. 

The tender offer for Hydrogen was made on behalf of the executive directors and certain founder investors and directors in Hydrogen (Concert Party) who between them held approximately 42% of the company’s issued share capital. The tender offer was for up to 58% of the company’s share capital (with the members of the Concert Party providing irrevocable undertakings not to tender their shares) and the proposals were conditional upon valid tenders being received in respect of shares representing at least 15% of the company’s issued share capital.

As the successful completion of the transaction would result in the Concert Party obtaining statutory control of the company and the independent directors resigning from the board, the Panel determined that the tender offer should be treated, for the purposes of the Code, as though it were an offer to acquire the entire issued share capital of the company by the Concert Party.

Public to private transactions

In our H1 2020 public M&A trend report we noted an increase in the proportion of firm offers that were P2P transactions, with 67% of all firm offers announced during H1 2020 being made by private equity, financial investors and/or individuals/family offices. This trend continued in Q3 2020, with nine (75%) of the 12 firm offers announced being public to private transactions. 

Private equity, financial investors and individuals/family offices continued to be involved on large transactions, with three of the four £1bn plus transactions announced in Q3 2020 being P2P transactions. Aggregate deal value for P2P firm offers was £6.3bn, which represented approximately 63% of the aggregate deal value in Q3 2020. 

Consideration and bid financing

Cash remained king, being the sole form of consideration for ten (83%) of the 12 firm offers announced in Q3 2020. This was an increase on H1 2020, when cash was the exclusive form of consideration on 67% of firm offers. The two non-cash offers announced in Q3 2020 were Integumen’s offer for Modern Water and RWS Holdings’ offer for SDL, both of which were structured as all share offers and were made by AIM-quoted bidders. 

Of the ten cash offers announced in Q3 2020:

  • 3 were funded solely by existing cash resources
  • 2 were funded solely by debt financing
  • 1 was funded solely by equity subscriptions to bidco/PE funds
  • 2 used a combination of debt financing and equity subscriptions to bidco/PE funds
  • 1 used a combination of existing cash resources and debt
  • 1 used a combination of existing cash resources, debt finance and equity subscriptions

Viaro Energy’s offer for RockRose Energy was financed by facilities provided by the private offices of two UAE investors: H.H. Shaikh Thiab Bin Khalifa Al Nehayan and H.H. Sheikh Zayed Bin Suroor Bin Mohammad Al Nahyan. The scheme document described both private offices as having considerable experience providing financing in the UAE real estate sector. However, in light of the coronavirus pandemic, the investors were diversifying their interests to include the provision of finance for corporate transactions. 

Bidders country of incorporation  

Overseas bidders accounted for 58% of all firm offers announced in Q3 2020. Of the 12 firm offers:

  • 5 (42%) were made by UK bidders (H1 2020: 50%)
  • 4 (33%) were made by US bidders (H1 2020: 33%)
  • 1 (8%) was made by a Cayman Islands bidder
  • 1 (8%) was made by a Russian bidder[1]
  • 1 (8%) comprised bidders from South Africa and Finland

Overseas bidders were involved in all four £1bn plus transactions announced in Q3 2020. Aggregate deal value for all firm offers involving overseas bidders was £8.9bn, representing 89% of the total aggregate deal value in Q3 2020. This is a significant increase on H1 2020 when the aggregate deal value of all firm offers involving overseas bidders was £679m, which accounted for approximately 26%of aggregate deal value during the period.

[1] Fortiana Holdings is a Cyprus registered company, which is wholly owned by Vladislav Sviblov.


Industry sector

Public M&A activity was not centered around any specific sector in Q3 2020, with two firm offers being announced in each of the Financial Services and Healthcare sectors, and the remaining firm offers occurring in a variety of sectors. These two sectors, together with Computing & IT and Media & Telecommunications, were also the most active sectors between Q1-Q3 2020, with three firm offers being announced in each sector. This represents 48% of all firm offers announced between Q1-Q3 2020.

The largest firm offer in Q3 2020 was in the Support Services sector (GardaWorld’s £3bn offer for G4S).

Hostile offers

Q3 2020 saw one hostile firm offer: GardaWorld’s £3bn ongoing bid for FTSE 250 security company, G4S.  By contrast all of the firm offers announced in H1 2020 were recommended. 

Deal in focus: G4S offer by GardaWorld

14 September 2020: Garda announces a possible offer for G4S at 190p per share.

Garda claims to have made three attempts to engage with the G4S board over the last three months, which have been dismissed or ignored.  The announcement states:
‘GardaWorld believes G4S is a business which has not delivered for shareholders, customers, employees or the public. G4S needs new, professional and experienced leadership to build a credible strategic plan which will transform G4S's prospects and distance the business from its unhappy past’

14 September 2020: The G4S board unanimously rejects the offer, claiming it ‘significantly undervalues the Company and its prospects ‘ and ‘is highly opportunistic, coming as it does at a time of severe turbulence in global financial markets’
The board also confirms, that prior to this announcement, they had also unanimously rejected two previous offers at 145p per share (on 15 June 2020) and 153p per share (on 26 June 2020).

15 September 2020: G4S releases a further statement restating that the offer undervalued the company and its prospects and is highly opportunistic, advising shareholders to take no further action.
The board also went on to highlight the company’s ‘resilient performance’ in H1 2020, and the steps it has taken to improve the company, including reshaping its portfolio and enhancing governance and controls.

30 September 2020: GardaWorld announces a firm offer for G4S at 190p per share. The deal values G4S at £3bn.

6 October 2020: GardaWorld announces start of engagement programme with key G4S shareholders and highlights pension liabilities of over £2.7bn, £1.6bn ‘one-off’ and five potential lawsuits as evidence that G4S requires new owners.

7 October 2020: G4S have responded to GardaWorld’s latest announcement reaffirming its belief that the offer significantly undervalues the company. It has also stated that GardaWorld is focusing on ‘legacy issues, which are now substantially resolved’ to support its offer.
G4S also highlighted Gardaworld’s reported net losses attributable to shareholders of C$940m (£550m) over the past 3 years.

9 October 2020: G4S announced it has received an expression of interest from Allied Universal Security Services regarding a possible offer for the entire issued and to be issued share capital of G4S.
While no definitive recommendation has been given regarding the approach as of yet, the board went on to state within the announcement that ‘shareholders are strongly advised to reject GardaWorld’s unattractive and highly opportunistic offer of 190 pence per share’.

Competing offers

Four companies were the subjects of potential competing bids in Q3 2020, compared to two companies in the whole of H1 2020. These were the AA, Redcentric, Pollen Street Secured Lending and William Hill.

TargetPotential biddersOutcome/status
  • Warburg Pincus
  • Platinum Equity Advisers
  • A consortium comprising Centerbridge Partners Europe and TowerBrook Capital Partners (U.K.)

Discussions terminated with original bidders.

AA is now in discussions with a new consortium comprising TowerBrook and Warburg.
  • Macquarie Principal Finance Pty 
  • Six Degrees Holdings
Discussions ongoing with both bidders
Pollen Street Secured Lending
  • Waterfall Asset Management 
  • Honeycomb Inv Trust 

Discussions ongoing with Waterfall

Discussions terminated with Honeycomb
William Hill 
  • Apollo Global Management
  • Caesars Entertainment
Recommended firm offer announced by Caesars
Deal in focus: William Hill 

25 September 2020: William Hill announces that it has received two separate cash proposals from Apollo Management International and Caesars Entertainment

28 September 2020: Caesars announces that it is in advanced discussions with William Hill and has confirmed an offer price of 272p per share, valuing William Hill at £2.9 bn. Caesars and William Hill currently operate a US joint venture with 20% and 80% equity ownership respectively. If Apollo should acquire William Hill, Caesars will be entitled to terminate its joint venture with William Hill.

30 September 2020: The boards of William Hill and Caesars Entertainment announces a recommended cash offer pursuant to which Caesars UK Bidco shall acquire the entire issued and to be issued share capital of William Hill.

Possible offers and FSPs/strategic reviews

There were 15 possible offers in relation to nine targets in Q3 2020. This compares with ten possible offers in H1 2020 (seven in Q1 2020 and three in Q2 2020).

Of these, only three progressed to firm offers (being Caesars’ bid for William Hill, GardaWorld’s bid for G4S and Sampo, and Rand Merchant’s bid for Hastings Group), seven were terminated, and five were still going at the end of the review period. 

In addition, three FSPs were announced in Q3 2020, all of which were AIM quoted companies. 

Firm offers included in this report

Target BidderDeal valueIndustry sectorBidder Jurisdiction
G4S plc (FTSE 250) Garda World Securities £3bn Support services United States
William Hill plc (FTSE 250) Caesars Entertainment, Inc £3bn Travel, hospitality, leisure & tourism United States
Hastings Group Holdings plc (FTSE 250) Sampo plc and Rand Merchant Investment Holdings Limited
£1.7bn Financial services South Africa, Finland
Highland Gold Mining plc (AIM 100) Fortiana Holdings Limited £1.1bn Mining, metals & extraction Russia*
SDL plc (FTSE 250) RWS Holdings plc £854m Computing & IT England & Wales
RockRose Energy plc Viaro Energy Limited £248m Oil & gas England & Wales
Cello Health plc Pharma Value Demonstration Bidco Limited * £179m Healthcare United States
HWSI Realisation Fund Limited Cubitt Trade Holdings LLC £80m Financial services Cayman Islands
Collagen Solutions plc Rosen's Diversified, Inc. £30m Healthcare United States
Modern Water plc Integumen plc £21m Engineering & Manufacturing England & Wales
HML Holdings plc BDB Nominee Co Limited £19m Property England & Wales
Hydrogen Group plc executive directors and certain founder investors and founder directors £14m Professional services N/A

* Fortiana Holdings is a Cyprus registered company, which is wholly owned by Vladislav Sviblov

** on behalf of Arsenal Capital Partners V LP and Arsenal Capital Partners V-B LP


Further reading

For more information regarding some of the transactions covered in this report see our blog posts:


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Market Tracker is a unique service for corporate lawyers housed within Lexis®PSL Corporate. It features a powerful transaction data analysis tool for accessing, analysing and comparing the specific features of corporate transactions, with a comprehensive and searchable library of deal documentation across 14 different deal types. The Market Tracker product also includes news and analysis of key corporate deals and activity and in-depth analysis of recent trends in corporate transactions.