Key points:
- Private equity has made an indicative offer for Euromoney
- The way to maximise any price is to go public
- So, Euromoney has gone public with the private equity offer
Euromoney Institutional Investor (LON: ERM) shares are one of those companies that make their living in one of the little corners of the financial markets. While there is a magazine there it's much more than that, conferences, information supply and so on. Given that the people in the industry being covered are paid well, that the whole thing is in fact about flows of money here and there, decent amounts can be earned from reporting on the industry.
Euromoney shares are up 29% this morning as there's been the suggestion of a bid for the company. Private equity looks to see whether Euromoney can be taken private that is. This all being so so, a bit, interesting. What makes it become actually interesting is that Euromoney itself seems to be trying to flush the bidder out into the open. And that could mean that there will be one of those lovely bid fights to come.
As Euromoney says “received an approach from Astorg Asset Management S.àr.l and Epiris LLP (the “Consortium”) regarding a possible cash offer” OK, well, yes, there's a bid floating around, that's fair enough. But this is fun: “earlier approaches from the Consortium to the Board regarding a possible all cash offer for Euromoney at £11.75, £12.50, £13.10 and £13.50 per Euromoney share” and today's possible offer is at £14.61. What this is telling us is that the consortium thinks there's considerable value there in Euromoney otherwise they'd not have kept coming back with higher and higher indicative offers.
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At the moment no one is committed to anything. But clearly given that they're indicated an offer at £14.61 shows that they think it's worth that at least. What matters next is also, clearly, whether another offer arrives, another bidder, is there a fight about this or what? What happens next in short?
Which is where we get interesting. For Euromoney has said OK, we've talked, now it's time to out up or shut up. That's what this part means “by not later than 5.00 p.m. on 18 July 2022, either to announce a firm intention to make an offer for Euromoney”. Effectively, you're a month to make that firm offer or announce that you're not going to. If you don't then you're barred from making any other offer for 6 months. Also, announcing the highest price they've been willing to indicate yet gives any other potential bidders a clear shot as to where they've got to be. This is, indeed, how you flush out any other interest in the company.
The last line is a nice touch too: “This statement is being made by Euromoney without the prior agreement or approval of the Consortium.” This is not an agreed statement. It is Euromoney doing exactly that flushing. So, folks out in the market. This is what someone else is willing – probably – to offer. Anyone want to better that? Which is exactly the way to maximise any offer that does arrive.
Effectively, Euromoney has just said that they're willing, perhaps happy enough, to be bought at that £14.61. So, anyone prepared to offer more? They've fired the starting gun on rival bids that is – what matters now is whether any arrive.
