Shares in Arrow Global (ARW) shot up by as much as 15 per cent to a 12-month high following media reports that the distressed-debt buyer is being eyed for takeover by several private equity companies. The companies include Apax Partners, with prospective bidders evaluating whether to take the group private.
Arrow Global buys delinquent loan portfolios from mainstream lenders and uses its in-house data system to boost debt collections. Core collections were up a third to £139m during the first half of the year. In turn, pre-tax profit grew by a healthy quarter during that time. Shore Capital analyst Gary Greenwood says takeover speculation "is perhaps a little surprising given that the group is performing well, has a strong and capable management team and already carries a reasonable amount of financial leverage".
The reports follow the group's announcement a day earlier that it had co-invested in a portfolio of debt from a subsidiary Dutch Rabobank, with a face value of €1.7bn (£1.5bn). Arrow will service the debt as part of a five-year deal alongside CarVal Investors. This is part of management plans to extend its debt collection activity in the Netherlands.
