Significant shareholders have said they plan to oppose the private equity bid for Hyve Group.
Redwheel, the second largest stakeholder, owns 11.6% of the exhibition group, but has said the £481m offer from Providence Private Equity undervalues the business.
The bid for the London-based exhibition organiser, based on a valuation of 108p a share, was announced last month and is set to be voted on by shareholders on 3 May.
The second biggest shareholder in the group, Redwheel European Focus Fund has said they plan to reject the deal.
The Redwheel European Focus Fund said in a statement: “Redwheel EFF believes that the company is only just starting to deliver a recovery in profitability from the recent crises, in particular Covid19 and the Russian invasion of Ukraine.
“Redwheel EFF believes the company is yet to see the positive benefits of recent acquisitions and is progressing towards its aspirations of at least £250m of revenue, including double digit organic revenue growth, and a
30% operating margin. Therefore, Redwheel EFF considers at this stage that the offer price of £1.08 per share significantly
undervalues the company’s potential and wishes to make it known that it does not currently intend to tender its shares.”
Redwheel EFF has been a shareholder in Hyve Group plc since June 2018 and currently holds 33.8mn shares, representing 11.6% of the company’s outstanding share capital.
Two other top investors in the company, M&G and Blackmoor Investment, have also opposed the buyout. M&G currently has just under a 3% stake in Hyve. Blackmoor holds a 2.3% stake.
Providence Equity Partners LLC brought in Searchlight Capital Partners UK LLP as a bid partner for its agreed takeover offer for Hyve. Searchlight will buy a 40% stake in Heron UK Bidco Ltd, the acquisition vehicle for the Hyve deal.
A majority of eligible shareholders will need to vote in favor of the scheme at the court meeting and eligible Hyve shareholders need to vote in favour of the Resolution at the General Meeting due to be held on 3 May.
The dissenting investors pose a legitimate threat to Providence’s bid, which requires a 75 per cent vote in favour.
Hyve Group to be acquired by Providence Equity Partners in £481m deal
