19th May 2022 14:42
(Alliance News) - Homeserve PLC became the latest name in the UK services industry to agree to a takeover, following the likes of G4S PLC and Sanne Group PLC, and analysts at Davy believe more deals of this nature could be in the offing.
Homeserve backed a GBP4 billion takeover bid from Brookfield Infrastructure Partners. Brookfield subsidiary Hestia Bidco has offered 1,200p per share in cash for each Homeserve share. This represents a 71% premium to HomeServe's closing price on March 23, being the last business day before the start of the offer period. The offer is also 14% above Wednesday's closing price of 1,053p.
Shares in the Walsall, England-based home repairs company were 10% higher at 1,162.00 pence each in London on Thursday afternoon, giving it a market capitalisation of GBP3.91 billion.
"It is the latest of the UK services names to fall to private equity in the last 18 months – G4S, Aggreko, Sanne, Equiniti have all gone the same way," analysts at Davy commented.
G4S was acquired by California-based security and staffing provider Allied Universal in a deal worth GBP3.8 billion last year. Power generator manufacturer Aggreko PLC was acquired by Albion Acquisitions PLC for GBP2.32 billion.
Sanne last year came to an agreement to be acquired by Apex Acquisition Co Ltd in a GBP1.51 billion deal, while financial administration outsourcer Equiniti Group PLC exited the London Stock Exchange in December following a GBP673 million takeover by Siris Capital Group LLC.
Davy added: "Considering the public markets' unwillingness to look through any short-term niggles in market-dominating, cash generative, growth stocks, we fully expect further deals of this nature when such significant price weakness occurs."
Homeserve, a FTSE 250 constituent, owns the Checkatrade directory which offers a list of recommended tradespeople.
Analysts at broker Liberum believe another bid for Homeserve may come.
They explained: "We are not surprised that Brookfield sees value here… and they could be accused of being opportunistic. We suggest that the language leaves some leeway for another bid. Our view: We believe that the offer is reasonable but not knock-out and that the door is open to another bid.
"Prior to the news of a potential bid, Homeserve's share price had been weak due to unjustified concerns, in our opinion, around changes in the UK energy landscape which could dent customer acquisition among the challenger energy partnerships."
By Eric Cunha; [email protected]
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