- Offer values group at £214mn
- Peel Hunt argues price "looks cheap"
Energy support group Sureserve (SUR) has been snapped up by a private equity firm, in a deal that represents a 38.9 per cent premium to yesterday’s closing price of 90p.
The board of Sureserve said it had agreed an all cash offer with Cap10 Partners, and intends to unanimously recommend the deal to shareholders. Under the terms of the acquisition, shareholders are entitled to receive 125p in cash for every Sureserve share, valuing the group at approximately £214.1mn.
The board said that the terms of the deal looked “fair and reasonable” and in the best interests of Sureserve shareholders as a whole. Roughly 23 per cent of the group’s concentrated investor base have given irrevocable undertakings, with letters of intent from a further 16 per cent.
However, analysts at Peel Hunt argued that the deal “modestly undervalues” Sureserve’s prospects, given the outlook for organic growth and its ability to deploy cash for acquisitions. “We would not completely discount the prospect of a competing PE or trade bid,” the broker concluded.
Momentum at Sureserve has been building in recent months, as the focus on fuel poverty has intensified. Revenue jumped by 27 per cent in the year to 30 September 2022, while its order book grew by 18 per cent to around £594mn at the year-end.
