Bid talks boost Euromoney shares

Shares in Euromoney Institutional Investor jumped 29% to 1404p earlier this week after the company revealed it had received a takeover bid from Astorg Asset Management and Epiris LLP.

The private equity companies based in Luxembourg and the City of London, respectively, have offered 1461p per share or £1.6 billion for the investment publishing and events firm.

Ahead of the cash-based bid, the shares were trading at 1089p. Euromoney, which publishes Metal Bulletin and Euromoney Magazine among other titles, revealed the consortium previously made four other cash offers, at £11.75, £12.50, £13.10 and £13.50 a share.

Euromoney's management warned investors, however, that there could be "no certainty that an offer will be made - nor as to the terms on which any offer might be made."

The so-called 'put up or shut up' deadline is 18th July, by which time the suitors must present a firm offer for the publisher or drop their bid.

Euromoney hard hit by Covid-19

Shares in the FTSE 250-quoted company, which sells financial data as well as organising events and exhibitions, such as International Telecoms Week, have been hard hit by Covid-19 pandemic. Social distancing rules meant multiple events had to be cancelled.

While trading has improved as restrictions have been dropped and in-person events have returned, the shares have remained well below pre-Covid highs of 1510p, seen in September 2019.

At the full-year results, CEO Andrew Rashbass told investors that the company had "made a step change" towards becoming a "fast-growing, high-margin, 3.0, information-services subscription business." Indeed, 70% of Euromoney's revenues came from subscription services last year, while 18% came from events.

The company made adjusted pre-tax profits of £61.4 million in 2021, up 13% on the previous year.

Rashbass also said that the Fastmarkets and financial and professional services businesses had delivered subscriptions growth, while Euromoney's asset management division was returning to growth.

Euromoney: Predator turned prey

The company had signalled to investors at the full-year results in November last year that it was on the acquisition trail. It had net cash of £32.5 million on its balance sheet as of 30th September and unused banking facilities and was setting its sight on "all-size acquisitions," most likely in the US wealth management space.

With many company share prices at depressed levels in the current rout, it's possible its suitors might seek to combine Euromoney with other targets in the sector.

At 1404p, the shares are best held onto for now to see if a firm offer emerges. Euromoney is also due to report a trading update on 21st July - three days after the takeover deadline.

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*Based on revenue excluding FX (published financial statements, June 2021).