US private equity group Providence takes on UK event organizer Hyve in £481m deal
Private equity has rushed into another British company battered by the pandemic.
US firm Providence Equity Partners has agreed to pay 108p per share for event organizer Hyve, valuing it at £481m.
The deal sent shares of the London-listed company, which is behind exhibits such as fashion show Pure London, up 10.4%, or 10.4p, to 110p.
That was above the level of Providence’s offer, suggesting to investors that a competing offer could follow.
Takeover: US-based Providence Equity Partners has agreed to pay 108p per share for event organizer Hyve, valuing it at £481m
But it is still 80% below pre-Covid highs, fueling fears that UK companies will be cheaply taken over by foreign predators in the wake of the pandemic.
Interest in UK corporate takeovers grew during Covid as bidders sought to take advantage of depressed price tags in a wave of ‘pandemic looting’.
G4S, AA, Morrisons and Ultra Electronics are among the companies that have been sold off in recent years.
Danni Hewson, head of financial analysis at AJ Bell, said the Hyve deal was another example of private equity “reaping a UK deal”.
She said: ‘Hyve is perfectly positioned for real growth, but with money getting more expensive it’s probably no surprise that it has been looking for a safe bet to help it grow further and faster. than he would have done otherwise.
“And the board pushed for what they felt was a fair price for the business in today’s tough economic climate, but a fair deal today seems cheap when you consider past performance.”
The takeover will mean Mark Shashoua, founder and chief executive of Hyve, could earn up to £1.2m from the deal, based on his unearned shares in the company.
A number of Hyve directors and major investors Strategic Value Partners have already backed the deal, meaning Providence has the approval of shareholders controlling just under 17% of the voting rights.
Hyve Chairman Richard Last said: “The board believes the offer represents shareholder value and that Providence, with its industry knowledge and confidence in the commercial and management team, will a good partner for Hyve.”
If approved by shareholders, the deal would be completed in May and would mean the company would be delisted from the London market.
Hyve, formerly International Trade Exhibitions, was founded in 1991 by the Shashoua family, which sought to capitalize on former Soviet Union states transitioning to market economies.
Nearly all of its exposures are now in advanced economies, having sold some global operations over the past year.
But Hyve shares have failed to recover since the £900billion events industry was brought to a halt at the start of the pandemic.
This was compounded by the war in Ukraine and Hyve’s decision to shed its Russian business in response.
But business has slowly picked up, with company revenue in the 12 months to September 2022 at 90% of pre-Covid levels, with the second half of the year at 110%.
The US private equity group said: “Providence believes that Hyve has established a solid platform for future organic and inorganic growth, underpinned by Hyve’s portfolio of high-quality global brands and market-leading events focused on in developed markets and in growth sectors.”
Providence’s portfolio includes a majority stake in New York-listed software company Double Verify and control of the franchise arm of Spanish soccer giant Real Madrid.