By Samuel Indyk
Investing.com – Shares in Sanne Group jumped 20% on Friday after the company received and rejected an unsolicited takeover approach from private equity firm Cinven.
The FTSE 250 company said in a statement it had received three unsolicited non-binding, indicative proposals, the latest an all-cash offer of 830 pence per share.
The board engaged with Cinven to explain why the proposal significantly undervalued the company and why it does not merit further engagement.
“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,” said Sanne Group (LON:SNNS) non-executive chairman Rupert Robson.
“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 said it is considering its position.
The private equity firm could now be tempted to walk away from any potential deal, according to Hargreaves Lansdown equity analyst Nicholas Hyett.
“The offer from Cinven represents a healthy 38% premium to the closing price last night, and might usually have been seen as pretty tempting,” Hyett said.
“The shares are trading at 763 pence this morning, some way below the offer price and an indication that investors think there’s a strong chance Cinven will walk away from the deal without improving its offer.”