Fund services group’s poker face pays off

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A player checks his cards in the Azov-City gambling zone, 56 miles south of Rostov-on-Don, Russia, September 23, 2010. 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)

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Editing by George Hay and Oliver Taslic

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