It’s poaching season for Australian and offshore private equity firms set to unleash a bidding spree targeted at ASX-listed companies.
Street Talk’s heard stories across the market – from bankers, lawyers, private equity fund managers, institutional investors – above a pending wave of public-to-private bids targeting the small and mid-cap ends of the Australian market. Genex Power, Virtus Health, Infomedia could be just the start.While PE firms have been cashed up for years, they’ve struggled to bid high enough to get company chairmen and directors to take them seriously.
Boards are increasingly assessing approaches based on premiums to three-month VWAPs, not just a premium to spot prices. The market tanked in June, and is still nowhere near recovering. So the longer the ASX/SP200 trades below 7000 points , the more likely bids will look attractive come August and September.So while Street Talk’s pointed out PE’s propensity to miss buying windows in the past, it feels like the window’s opened. There’s already a few bids in the market, which could help sentiment.
Mining services company Maca Ltd, whose shares have charged on recent contract wins, also has a few fans, whileThe other rich hunting group is companies formerly owned by PE or PE-like investors, such as Macquarie Capital. There’s a plethora of them, thanks to the IPO window opening in 2013 and largely staying open until late last year. Plenty have already been acquired or bid for: Spotless Group, Veda, Healthscope, Link, MYOB, Greencross.
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