LONDON, Aug 2 (Reuters Breakingviews) - Sanne’s (SNNS.L) board looks to have been vindicated. After rebuffing an 830 pence bid from private equity group Cinven, the fund administration services company said it would recommend an offer of 920 pence a share from financial services provider Apex Group which, if consummated, would value the group at 1.6 billion pounds including debt. Unlike Cinven, Apex would benefit from cost savings as it already provides services to funds. It would have to, since Refinitiv estimates imply net operating profit after tax will only be around 62 million pounds in 2023, a sub-4% return.
Rivals will be watching closely. The fund services sector has proven popular with buyout groups like Blackstone (BX.N), which invested in Intertrust (INTER.AS), and Hellman & Friedman, which bought into Allfunds (ALLFG.AS). And Apex itself has been active, last month buying Australian Mainstream Group (MAI.AX) for A$415 million ($305 million). More deals look likely, but Sanne’s 911 pence price as of 0918 GMT suggests that it itself may not receive more counterbids. (By Dasha Afanasieva)
On Twitter http://twitter.com/breakingviews
Capital Calls - More concise insights on global finance:
Santos deal tries new angle on less is more read more
EU stress tests strengthen case for Italy bank M&A read more
“Black Widow” pits superhero against giant read more
P&G puts stark number on inflation read more
The SEC is finally getting serious on Chinese IPOs read more
Reuters Breakingviews is the world's leading source of agenda-setting financial insight. As the Reuters brand for financial commentary, we dissect the big business and economic stories as they break around the world every day. A global team of about 30 correspondents in New York, London, Hong Kong and other major cities provides expert analysis in real time.
Sign up for a free trial of our full service at https://www.breakingviews.com/trial and follow us on Twitter @Breakingviews and at www.breakingviews.com. All opinions expressed are those of the authors.