M&G Investments is leading a shareholder revolt against Hyve’s private equity takeover worth PS481 million. It claims it substantially undervalues the international exhibition business.
Hyve announced last month it agreed to takeover Providence Equity Partners’ 108p per share offer. The media-focused US investor initially offered 101p and then 105p.
Each share of the events company was valued at 41% more than the 77p that it traded the day before Hyve had to issue a statement verifying Providence’s interest.
Hyve’s acquisition is valued at approximately £320 million on an undiluted basis. This equates to an enterprise value in excess of £481million, including debt. Strategic Value Partners, with a 16.4% stake, stated that it would vote for the deal.
The Shashoua family founded Hyve in 1991 as International Trade Exhibitions. It hosts 33 events in person and 23 tech-enabled brand, including Pure London, Shoptalk and Spring Fair as well as the recently acquired Fintech Meetup.
M&G, along with Redwheel Investment Partners and Blackmoor Investment Partners, is one of three Hyve institutional investors that will oppose the Providence offer. Providence must approve 75% of the scheme.
Rupert Krefting is M&G’s head of corporate finance stewardship. He stated that the latest Hyve offer significantly undervalues the company. We will vote against the takeover. We support the management team’s strategy to capitalize on the substantial investments made in the recent years.
David Stewart, Redwheel fund manager and second largest shareholder in Hyve with over 10 percent, intends to vote against the deal.
Douglas Smith, Blackmoor’s managing partner and top-20 shareholder, raised concerns about the £481million enterprise value that was cited by Hyve, and suggested that it should be closer to £440 millions.
Smith stated that Smith believes this is a high quality business that is in recovery. It has significant barriers to entry due to the network effect at each conference level, and has pricing power during inflationary times. It has also reduced its exposure to Russia.
Richard Last, chairman at Hyve, stated: “The board believes that the offer represents value to shareholders and that Providence with their sector knowledge and belief in management will be a good partnership for Hyve.
Since 1989, Providence has invested over $32 billion. It declined to comment.
Hyve shares fell 1/2 p or 0.5% to 112p