European Event-Driven Analyst

Jesus Rodriguez Aguilar

Jesús is an Insight Provider (Event-driven) on the Smartkarma network, where he looks across sectors at opportunities arising from securities mispricing (both credit and equity), share classes, bid announcements, prospective bids, and special situations. He has served as Economic and Business Advisor at the Spanish Congress in Madrid. Prior to that, he has worked in the City of London: as a Credit Analyst at Bloomberg; Event-driven associate at former boutique European Research; and doubled as Special Situations and Equity-linked VP (convertible bonds) at Merrill Lynch. Jesús has an MBA from the London Business School, a BA (Hons.) degree in Economics from the Complutense University in Madrid, and a BA (Hons.) in Law from U.N.E.D., also in Madrid.

CSC/Intertrust NV: Conditional Offer Agreement

Event-Driven

<a href="https://www.smartkarma.com/entities/sanne-group-plc" target="_blank" data-smartkarma-citation="entities:22155:1" rel="noopener">Sanne Group PLC (SNN LN)</a> has agreed to a £1.51 billion takeover by Apex, a PE-backed competing provider of services to the financial industry.
The offer is 920p/share, 0.5% above my estimate of fair value of 915p (see <a href="https://www.smartkarma.com/insights/cinven-sweetens-possible-offer-for-sanne" target="_blank" data-smartkarma-citation="insights:52932" rel="noopener">Cinven Sweetens Possible Offer for Sanne</a> ), and c. £90 mn higher than the previous prospective offer from Cinven (at 875p/share).
<ul>
<li>For an implied equity value of c. £1,509.4 mn and implied EV of £1,625.2 mn; 24.7x EV/21e EBITDA and 33.5x Fwd P/E (Capital IQ consensus).</li>
</ul>
The bid represents a further move in the consolidation of a sector that has proved resilient during the pandemic.
Sanne closed at 932p on 27 August, 1.3% above Apex's offer, and c. 11% higher than the levels the shares traded when I reiterated my long recommendation. The market believes there will be a counteroffer from Cinven.
Cinven must make an offer <a href="https://www.sannegroup.com/media/yt0jx1bc/continued-discussions-with-cinven-and-pusu-extension.pdf" target="_blank" rel="noopener">before</a><a href="https://www.sannegroup.com/media/yt0jx1bc/continued-discussions-with-cinven-and-pusu-extension.pdf" target="_blank" rel="noopener"> 5.00pm on 30 August</a>. This time Cinven will highly likely make a serious counteroffer as opposed to the previous low-ball bids, in my view. A bid could come at levels close to 950p/share, 3.2% above Apex's offer, 29.7x P/22e E (on Capital IQ consensus), which does not sound excessive. The industry is consolidating and with money inflows into alternative assets, great benefits could be captured from gaining scale. Reiterate long SNN LN.
Sanne belongs to the FTSE 250 index.

Sanne Group PLC (SNN LN) has agreed to a £1.51 billion takeover by Apex, a PE-backed competing provider of services to the financial industry.
The offer is 920p/share, 0.5% above my estimate of fair value of 915p (see Cinven Sweetens Possible Offer for Sanne ), and c. £90 mn higher than the previous prospective offer from Cinven (at 875p/share).

For an implied equity value of c. £1,509.4 mn and implied EV of £1,625.2 mn; 24.7x EV/21e EBITDA and 33.5x Fwd P/E (Capital IQ consensus).

The bid represents a further move in the consolidation of a sector that has proved resilient during the pandemic.
Sanne closed at 932p on 27 August, 1.3% above Apex's offer, and c. 11% higher than the levels the shares traded when I reiterated my long recommendation. The market believes there will be a counteroffer from Cinven.
Cinven must make an offer before 5.00pm on 30 August. This time Cinven will highly likely make a serious counteroffer as opposed to the previous low-ball bids, in my view. A bid could come at levels close to 950p/share, 3.2% above Apex's offer, 29.7x P/22e E (on Capital IQ consensus), which does not sound excessive. The industry is consolidating and with money inflows into alternative assets, great benefits could be captured from gaining scale. Reiterate long SNN LN.
Sanne belongs to the FTSE 250 index.

Sanne Group PLC

Apex Leads Takeover Contest for Sanne