TRIBAL Group, which provides government outsourcing services and coordinates school inspections, saw its shares leap yesterday after confirming it had been the subject of a slew of takeover approaches.
The interest is thought to have come primarily from private equity companies, with Asia-focused New Silk Route (NSR) or larger rival Capita touted as potential buyers. Analysts said Tribal’s budding Asian education software business would strike a chord with NSR’s strategic focus on investing in Eastern markets.
Tribal’s government business also looks attractive to bidders as the Aim-listed company positions itself as a leading consultant to the public sector, to help steer it through the slimming-down process prompted by the coalition’s austerity drive.
“The company is very well-positioned to support public sector organisations as they undertake change and to participate in an expected acceleration of outsourcing opportunities that will contribute to the improvement in public sector efficiencies,” Tribal said in an update yesterday.
Reports put the potential price tag for Tribal at around 100-125p a share, though sources close to the firm said a bid at that level would be viewed as relatively low-ball. Taking house broker Investec’s year-end EPS forecast of 11.6p as a basis, a bid at 125p per share would put the company’s valuation at under 11 times earnings – a marked discount to larger rivals such as Capita, which trades at over 17 times earnings.
“Tribal confirms that it has received preliminary expressions of interest which may or may not lead to an offer being made,” the firm said yesterday.