Sanne Group rejects £1.35bn offer from Cinven

Sanne Group rejects £1.35bn offer from Cinven

On 14 May 2021, private equity firm Cinven Limited (Cinven) confirmed that its possible cash offer made on 4 May 2021 to acquire the entire issued and to be issued share capital of Sanne Group plc (Sanne) at £8.30 per share was rejected. 

Cinven’s offer values Sanne at approximately £1.35bn, at a 37.6% premium to its trading price one day prior to the announcement (pre-announcement price of £6.03) and allows eligible Sanne shareholders to retain the right to receive the final dividend of 9.9 pence per share declared on 19 March 2021. Sanne’s share price jumped by 21.2% at the close of business on the day of the announcement.

Sanne since confirmed that it has been in receipt of three unsolicited offers from Cinven, the most recent being the one received on 4 May 2021. The board of Sanne believes that Cinven’s proposal was opportunistic and significantly undervalues the company. In outlining its reasoning, the board made reference to the global reach of the company, its business model and unique technology platform, the strength of its end markets, growth opportunities, and confidence in the company’s medium and long-term prospects. Accordingly, the board unanimously rejected the proposal and advised shareholders to take no action in relation to the offer. 

Sanne is a Jersey incorporated FTSE 250 company that delivers alternative asset and corporate administration services worldwide. In 2015, Sanne came to market at £2.00 per share indicating a healthy return for its long-term investors. In its annual report, Sanne noted the effects of the COVID-19 pandemic on its business, with delays to fundraising, closing and reduced transaction levels but was optimistic that Sanne would perform well in 2021 with a return to double-digit revenue growth rates as the markets recover.

Rupert Robson, Chairman of Sanne, said the following of the offer: 

We are extremely confident in Sanne's strengths and future prospects, especially as our markets continue to recover and our well-supported equity raise will assist us in executing on the robust M&A pipeline. There is good momentum at all levels and we are very well-placed to take advantage of the significant opportunities we see. We appreciate that we have a unique platform of real scarcity value from which we can continue to grow. As a Board, we are aware of our responsibility to create and capture value for our shareholders, but this proposal falls well short of that threshold for us to fully engage.”

Cinven is currently considering its position and has until 11 June 2021 to announce a firm intention to make an offer or withdraw its interest. 

Market Tracker will continue to monitor this transaction as it develops. 

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