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Alternative set to be another link in Daisy's chain

The managed IT services provider has agreed to join rival Daisy's ranks
November 22, 2016

Investors in Alternative Networks (AN.) cheered a takeover bid from Daisy by sending the managed IT services group's shares up 17 per cent. The offer represents a 20 per cent premium to Alternative's average share price for the six months leading up to the bid, and has received support from several major shareholders.

IC TIP: Await documents at 333p

Rival Daisy was taken private at the end of 2014 and acquired another peer, Phoenix IT, last summer. It expects Alternative to bolster its range of mobile and fixed-line offerings, generate economies of scale and open up cross-selling opportunities. Alternative's board cited an uncertain market backdrop and limited liquidity in the group's shares, adding that dividend growth would have to reflect growth in underlying profits eventually.

Broker FinnCap has withdrawn its forecasts. It previously expected adjusted pre-tax profits of £14.5m in the year to September 2016, giving EPS of 24.4p, down from £17.9m and 27.8p in FY2015.