Fund services group’s poker face pays off

A player checks his cards during the finals of the Russian Masters Poker Cup in the casino at the Azov-City gambling zone
A player checks his cards during the finals of the Russian Masters Poker Cup in the casino at the Azov-City gambling zone, some 90 km (56 miles) south of Russia's southern city of Rostov-on-Don, September 23, 2010. Russian Masters Poker Cup is the first poker tournament since July 2009, when the government allowed gambling only in the four dedicated zone in the country. REUTERS/Vladimir Konstantinov

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

Editing by George Hay and Oliver Taslic

Our Standards: The Thomson Reuters Trust Principles.

Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

Read Next