Bid talks end for Candover Investments

PRIVATE equity firm Candover Investments said yesterday it had ceased takeover talks with a number of potential bidders, as it confirmed extensive cost cutting and the disposal of subsidiary Wood Mackenzie will allow it to meet its debt covenant obligations.<br /><br />The group warned it had run out of cash to invest in its own 2008 fund, in March and said it was considering all strategic options to reinforce its financial position.<br /><br />It added later in the month it had received a number of indicative expressions of interest from potential bidders, though it said yesterday that none of the proposals had sufficient certainty and would add enough value to warrant further consideration.<br /><br />&ldquo;There is considerable long term value within many of Candover&rsquo;s portfolio companies which, if realised, should positively impact its net asset value,&rdquo; chairman Gerry Grimstone said.<br /><br />He added: &ldquo;We were very conscious that an offer which did not recognise this value would not be in shareholders&rsquo; interests, nor would other measures that would result in unacceptable dilution.&rdquo;<br /><br />Grimstone said the firm continues to review whether an &ldquo;alternative ownership structure&rdquo; may be merited in the future.<br /><br />Candover added that it would meet the covenant obligations attached to its 2014 loan notes, after agreeing to sell energy research firm Wood Mackenzie to Charterhouse Capital Partners for an initial &pound;36.2m.<br /><br />The company has also implemented a strict cost-cutting drive, reducing its overall level of working capital and cutting jobs. <br /><br />The business has closed its Asia and Eastern European operations, reducing its annual salary bill by around &pound;7m.<br /><br />The shares rose 7.25 per cent yesterday to close at 333p.