M&A Monitor Ltd

Earlier this week the UK Government effectively cleared Daniel Kretinsky’s £5.5 billion offer for International Distribution Services, agreeing to concessions that protect the Royal Mail and a “golden share” granted to the Government. It’s worth noting that now 13 hedge funds (according to our 8.3 Tracker) have declared over 1% shareholdings in IDS, with a total combined exposure of £662 million, which has more than doubled since we last commented on 5 September (£329 million, 8 hedge funds). This is a good indicator that the offer is now well-poised to succeed. This reflects quite a turnaround - back when Daniel Kretinsky first made his approach back in April, there was a lot of scepticism that he could get a deal through given the regulatory challenges.  #InternationalDistributionServices #RoyalMail #UKRegulation #MergersAndAcquisitions #MandA #LondonStockExchange #HedgeFunds

Yesterday Railsr, TowerBrook Capital Partners L.P. and J.C. Flowers & Co. finally announced a joint £283m offer for the London-listed payments technology company Equals. What makes this deal particularly interesting? Despite the Takeover Panel's "Put Up or Shut Up" (PUSU) rule designed to streamline acquisition processes, Equals Group's offer period extended beyond 13 months with three distinct approaches - a unique case where multiple PUSU extensions were granted. An interesting data point: Since its 2011 introduction, the PUSU rule has effectively reduced the average time between the initial approach and formal offer by 5 over days across UK public deals. #FinTech #MandA #PaymentsTechnology #UKTech #Finance #Investment #LondonStockExchange #PrivateEquity

Great stats team and a timely reminder via Bellway/Crest Nicholson that agreed terms 2.4's don't always become 2.7's.

This morning, Aviva and Direct Line Group announced that they have reached a preliminary agreement regarding a possible offer. The offer of 275p per share, a 10% increase on the previous proposal, is one that Direct Line would be minded to recommend. Our data shows that since the start of 2015, the average increase between a first indicative offer and the actual price offered is 8% (excluding those where terms weren't changed). However, this is not quite a done deal as it's still subject to due diligence. Some caution here - Bellway's approach for Crest Nicholson earlier this year reached the "minded to recommend" stage, but Bellway walked away in August without disclosing why, causing Crest Nicholson's share price to fall 20% in one day. #MandA #CorporateFinance #MergersAndAcquisitions #StockMarket #Valuation #Aviva #DirectLine

Today General Atlantic has announced a £802m cash offer for Learning Technologies Group plc (LTG). The offer of £1 per share represents a 33.5% premium to LTG's unaffected share price, though notably below 2024's average UK public takeover premium of 41.4%. Although there is room for a competing offer, no other approach has been reported. Regardless, this might be a good time for LTG shareholders to sell up – in outlining its recommendation the LTG Board highlighted the impending threat posed by AI to its services. This acquisition is particularly interesting given General Atlantic's involvement in last year's Kahoot! transaction, potentially creating synergistic opportunities in the e-learning space. #EdTech #MergersAndAcquisitions #PrivateEquity #CorporateStrategy #LearningTech #MandA #LondonStockExchange

ABC Technologies has just announced its recommended £1.04bn offer for TI Fluid Systems at 200p per share. The transaction followed an extended period of price discovery, with ABC's initial 165p approach in August followed by subsequent proposals at 176p, 188p, 195p, before reaching the 200p price. This represents a 21% increase from first approach to formal offer. Analysis of UK public offers since 2015 shows that the average increase (where there is one) from first proposal to eventual offer price is 11% (cash offers only). #MergersAndAcquisitions #UKdeals #PrivateEquity #Automotive #londonstockexchange

This morning, Aviva announced a £3.3 billion (250p per share) proposal to acquire Direct Line Group, marking the second approach for the company this year. Earlier, Ageas Group made a 233p proposal before ultimately walking away. Direct Line’s Board has swiftly rejected Aviva’s approach, stating that it “substantially undervalues the company.” The offer certainly raises interesting questions around valuation. While the premium on offer - 58% above Direct Line’s last share price - appears compelling, especially against the 10-year median premium of 36% for UK insurance bids, the Price/Book multiple tells a different story. Aviva’s proposal stands at 1.37x net assets, below the 10-year median of 1.62x in similar deals. Is this a lowball offer masked by an eye-catching premium? Or could the Board’s rejection change if shareholders weigh in? #MandA #CorporateFinance #MergersAndAcquisitions #StockMarket #Valuation #Aviva #DirectLine

🏦Today BancoBPM rejected UniCredit's €10 billion all-share offer, stating that it doesn't reflect the underlying profitability of the bank. Banco BPM also labelled the terms, with a low premium, "unusual" and added that the potential synergies were "not at all valued" by the terms of the offer. Looking at banking deals in Western Europe over the last 10 years (see table), low-premium offers aren't unprecedented. The strategy? Target shareholders often accept lower premiums in exchange for future synergy benefits post-merger. Nonetheless, given the response of the Banco BPM Board, we expect UniCredit will have to increase its bid. #Banking #MandA #FinancialServices #MergersandAcquisitions #UniCredit

Major Move in the Italian Banking Sector! This morning, UniCredit announced a €10 billion share-for-share offer for its rival, BancoBPM. This marks a significant step towards the long-anticipated consolidation in Italy's banking landscape. * Historical Context: From 1999 to 2008, there were 35+ deals exceeding €1 billion, but only 3 such deals have emerged since the financial crisis. * Valuation Shifts: pre-financial crisis price/book multiples above 2 and price/earnings multiples above 30 were commonplace. Now we’re routinely seeing price/book ratios below 1 and price/earnings in the single digits. This shift in valuations reflects the greater risk in the sector, which has seen a number of bailouts, as well as a more cautious market environment. #MergersAndAcquisitions #UniCredit #BancoBPM #Banking #Finance #BorsaItaliana #FinancialNews #Investment #CorporateStrategy