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

In my previous Insight about Sanne, I said an improved price for the intended offer by Cinven for <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>  before the PUSU deadline was highly likely (see <a href="https://www.smartkarma.com/insights/cinven-sanne-pusu-deadline-is-tomorrow" target="_blank" data-smartkarma-citation="insights:52390" rel="noopener">Cinven/Sanne: PUSU Deadline Is Tomorrow</a> ).
As it happens, on 11 June Cinven increased the price of its possible offer from 850p to 875p, which may be the prelude to the final stages to the game of brinksmanship between Cinven and Sanne.
The Board of Sanne confirmed it had consequently decided to enter into discussions with Cinven. The Takeover Panel consented to an extension of the PUSU deadline, until 17:00 on 9 July 2021.
Medium and long-term structural growth prospects for alternative assets remained strong, irrespective of the pandemic. For instance, Sanne saw a robust top line organic growth performance and good double-digit profit growth in 2020 despite a significant slowdown in its target markets.
Management suggests that Sanne could scale and expand its highly cash-generative and defensive model (indeed Sanne is a specialist in hedge funds, private debt, private equity, real assets, venture capital, as well as accounting, administration, fiduciary, governance and tax compliance services) and that its acquisitions-led strategy can surpass Capital IQ consensus estimates of £52.36 mn by 2023. Indeed Capital IQ consensus points to a double-digit revenue growth until 2023e.
On 11 June, Sanne closed at 840p, c.9% above the previous closing price (VWAP was 855p with c. £20 mn traded).
Gross spread to last prospective offer is 4%, which I think is an interesting level as there are high chances that the fifth offer was the opening gambit for the Board to engage in discussions leading to an increased offer. There may be further upside, albeit not a knock-out offer. My fair value estimate is 915p (4% above the offer).
Reiterate Buy SNN LN.
This is the latest offer by a private equity group on a UK midcap, after Aggreko, Equiniti, John Laing, Signature, UDG Healthcare (all covered here), and others such as St Mowden and Marston's. Pandemic and Brexit have had an impact on valuations and some investors are picking up bargains.

In my previous Insight about Sanne, I said an improved price for the intended offer by Cinven for Sanne Group PLC (SNN LN)  before the PUSU deadline was highly likely (see Cinven/Sanne: PUSU Deadline Is Tomorrow ).
As it happens, on 11 June Cinven increased the price of its possible offer from 850p to 875p, which may be the prelude to the final stages to the game of brinksmanship between Cinven and Sanne.
The Board of Sanne confirmed it had consequently decided to enter into discussions with Cinven. The Takeover Panel consented to an extension of the PUSU deadline, until 17:00 on 9 July 2021.
Medium and long-term structural growth prospects for alternative assets remained strong, irrespective of the pandemic. For instance, Sanne saw a robust top line organic growth performance and good double-digit profit growth in 2020 despite a significant slowdown in its target markets.
Management suggests that Sanne could scale and expand its highly cash-generative and defensive model (indeed Sanne is a specialist in hedge funds, private debt, private equity, real assets, venture capital, as well as accounting, administration, fiduciary, governance and tax compliance services) and that its acquisitions-led strategy can surpass Capital IQ consensus estimates of £52.36 mn by 2023. Indeed Capital IQ consensus points to a double-digit revenue growth until 2023e.
On 11 June, Sanne closed at 840p, c.9% above the previous closing price (VWAP was 855p with c. £20 mn traded).
Gross spread to last prospective offer is 4%, which I think is an interesting level as there are high chances that the fifth offer was the opening gambit for the Board to engage in discussions leading to an increased offer. There may be further upside, albeit not a knock-out offer. My fair value estimate is 915p (4% above the offer).
Reiterate Buy SNN LN.
This is the latest offer by a private equity group on a UK midcap, after Aggreko, Equiniti, John Laing, Signature, UDG Healthcare (all covered here), and others such as St Mowden and Marston's. Pandemic and Brexit have had an impact on valuations and some investors are picking up bargains.

Sanne Group PLC

Cinven Sweetens Possible Offer for Sanne