Huntsworth shares soar as private equity firm agrees £400m takeover
Shares in healthcare and communications group Huntsworth skyrocketed today after a US-based private equity firm said it has agreed a takeover deal worth roughly £400m.
Clayton, Dubilier & Rice (CD&R) today said it would pay 108p in cash per share in Huntsworth, which provides marketing services to healthcare clients.
The offer represents a 50 per cent premium on Huntsworth’s closing price yesterday. However, shares surged almost 53 per cent to 110p following the announcement.
Analysts at Peel Hunt described the bid as an “excellent price for the bidding company”, compared to its target price of 120p.
“We expect this modest valuation to leave the door ajar for speculation on the potential for a competing approach,” they said.
New York-based CD&R said it viewed Huntsworth’s underlying markets in the US and Europe as “attractive and underpinned by long-term, stable parma-related trends”. It added that it planned to help the healthcare firms pursue future acquisitions.
Huntsworth chairman David Lowden said: “Whilst we believe that Huntsworth is strongly positioned as an independent listed company, the all-cash offer from CD&R represents a compelling opportunity for shareholders to realise an attractive cash value in respect of their shares.
“In addition, the board believes CD&R will be an excellent partner for Huntsworth, its employees and customers.”
It came as Huntsworth reported a 27 per cent rise in pre-tax profit to £39.1m in the year to the end of December.
This was driven by a return to growth in its communications division, which includes London PR firms Grayling, Citigate Dewe Rogerson and Red Consultancy.
The group’s medical arm also continued to perform well, posting like-for-like revenue growth of nine per cent.
The acquisition would be the latest major acquisition by a US private equity firm in Britain as investors capitalise on a drop in the value of the pound.
Buyout firm Advent earlier this year completed its £4bn takeover of defence giant Cobham, while Blackstone has agreed to buy Legoland owner Merlin for £6bn.