The Siris offer, at 170p per share in cash, sets out what it describes as ‘a highly deliverable process and timetable to allow it to make a binding proposal’ under the Takeover Code.
Founded in 2011, Siris Capital specializes in investing in ‘mission-critical, mature tech & telecom businesses at strategic crossroads’. Over the last decade the firm has raised $5.9 billion of capital and it says it is targeting investment opportunities with transaction values of $500 million to $5 billion.
At 170p per share, Equiniti would be valued at £625 million or $868 million at current exchange rates, towards the bottom of Siris’s target range and a far cry from its 2018 peak valuation of over £1.1 billion.
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In reply to Siris’s approach, Equiniti released its own statement saying it would ‘evaluate the proposal carefully in all respects, together with its financial and legal advisers’.
However, it cautioned that the proposal was ‘highly conditional’ and ‘subject to a number of pre-conditions including completion of detailed due diligence and arrangement of debt financing’.
The fact that the firm is at a crossroads was reinforced earlier this year when new chief executive Paul Lynam was brought in with a brief to conduct a thorough strategic review of the business.
Lynam’s report is due by the end of July, the proposed date of the interim results, but whether the Siris offer will still be on the table by then is a moot point.
The fact that the shares aren’t trading at or above the 170p level reflects the fact Equiniti management haven't rejected the deal out of hand on the basis of price, which would be the typical response.
It also suggests investors aren’t sure a deal will come off or that there will be a rival approach for the firm.