Equals Takeover Rumours (EQLS)

Sold half my hdg here, with gains in most my pfolio in the last six mths showing 10-40% this has been a disappointing laggard which considering the amount of takeover activity in the mkt being frenzy levels it’s just odd the sp here hasn’t improved. This might help out holders

Exactly - how can cancelling Mello, while still in potential takeover talks, be viewed as a red flag !

The SP action makes it fairly clear that the market (who normally knows these things) doesn't think it will happen, or that it won't happen at the price most of us want. The SP also seems to indicate that EQLS isn't worth as much without the takeover as we expect.Or... There are a load of stale bulls who see better opportunities elsewhere. And at the speed this is going, they may well be right !

FWIW I spoke to the UK Takeover Panel case officer. She said there is nothing that they can do as it is entirely the responsibility of Equals Group with respect to the PUSU extensions. Reason being is that continuing PUSU extensions is in the interest of shareholders. She also pointed out that there have been several occasions when PUSU extensions have been much longer than that incurred by EQLS.

Makes the board look stupid and it also makes the whole concept of PUSU redundant - Takeover Panel should be having words

It’s all frustration and silly speculation but if a deal comes in at materially higher price you will be singing their praises again, haha Typical PI crap Or just take your money off if you’re so worried Imo we could have done without this takeover, it looked like being scaleable on its own accord and the shares were steadily doing nicely. Maybe the directors have been economical with the true reasons behind this

This in my view now reflects really poorly on EQUALS management. Utterly ridiculous. Having been involved in a plc takeover in my career, taking 6 months is just nonsense. Management could come out and say put up or shut up themselves or that discussions haven't led to anything so have terminated discussions, they will have to go hostile if so..... Management showing zero back-bone here it seems in these negotiations, hope I'm wrong, but if they can't get an offer from two bidders by now, what hope for holding out for a bigger premium/price? DYOR

I think its easy to forget, that to the best of our knowledge, it was Equals who started this process. They announced a strategic review, that may or may not lead to a takeover and specifically named two suitors. If it was a true strategic review then surely they have other options, ( raise debt themselves to take it private etc), so I feel its hard to blame MDP. Personally I think Ian S-T and team are good at running a business, but are not good at running a small, listed company. Just not enough transparency.

I'm expecting another PUSU extension or an announcement that takeover discussions have concluded with no deal. No bad thing in the medium term in the light of growing revenues and profit, even if the share price sags a little in the short term.

This is from the MDP website referencing financial sector investments. MDP’s Financial Services team has a history of both control and minority investing. Our focus is to find high-quality businesses led by talented management teams and work together to determine the optimal deal structure. Ankura and Navacord, while we have also recently completed minority structured equity investments in EVO Payments and Ardonagh Group. Perhaps we're all wrongly assuming that MDP will propose a takeover, as opposed to just becoming an investor......maybe this is the cause of the delay. It would also be a huge disappointment for shareholders.

The whole process since the announcement of a strategic review by EQLS has been strange. Referencing a company that immediately denied any interest, no real detail about other options and still no indication of what the management team think Equals to be worth. I hope that EQLS has a strong, independent Board as I fear the management's interest may not necessarily align with small shareholders, particularly if they are retained by the takeover entity.

The flip side of the high rates benefitting EQLS is it's a negative where valuations are concerned for Private Equity. If rates stay higher for longer then their bar is raised as to expectations from any proposed takeover,or the takeover price lowered. The interest rate picture has changed drastically in the US since November when 6 cuts were forecast, to barely any now, so perhaps this is weighing on the SP as it doesn't seem to reflect two interested parties.

They're going to blow past FY24 estimates (£23M EBITDA). Solutions is already doing £50M per year, at 60% gross margins, growing 70% y-o-y, and that doesn't reflect Europe which should start ramping later this year. With this momentum and scalability it is easy to see them hitting £150m revenue and £50m EBITDA in a few years, at which point market cap should be at least 150% higher than today. I assume the sticking point in takeover is that EQLS BoD / management can see a very viable path to that £50m EBITDA and a >£3 per share stock price within a couple years, whereas Madison Dearborn isn't willing to pay for the growth.

I agree with Hamid, the takeover/strategic review has kept a lid on the sp. I have seen it before in other companies They should reject bids which don’t materially increase the value and focus on the business It hasn’t helped the sp and their enthusiasm appears to have disappeared (whether that is to comply with regulations in such an event) I think if it weren’t for this exercise the info coming out of the co would have been much more upbeat and the sp would be much higher by now

I actually think all the takeover talk is holding back the SP. We should be saying put up or shut......we have a growing and very profitable business to run

Negotiations of course remain confidential but a number of lumpy sells have taken place this week. I'm happy to be proven wrong but I have a feeling there won't be any significant announcement regarding a possible takeover.

While Equals is likely to post an increase in profits.next week, I'm beginning to think there'll be no news on a possible takeover and can see the share price dropping back as a consequence. Happy to be proven wrong.

Gresham computing subjects to takeover. Equals next then Celebrus. Bango less likely but at risk

With two bidders now at the table, no one party can control the narrative. We will see how it unfolds. Very surprised that the share price is broadly where we were before any strategic review was announced. Given the business is performing strongly irrespective of takeover possibilities, the current state of play means that the risk/reward profile is very favourable with far greater upside potential than downside risk which is the reverse of what you would typically expect in this sort of situation.

I totally agree with all of the above so why are they still under 1.20 when they have two potential acquirors ........it makes zero sense to have no takeover premium in the current sp.

The longer it goes on the more likely a takeover

From the article There is potential for further M&A activity to boost its coffers, too. For instance, Madison Dearborn Partners has a Takeover Panel deadline of 21 February 2024 to announce a firm intention to make an offer or declare that it does not intend to make an offer for Aim-traded Equals ( EQLS:113p). DSM’s holds a £1.9mn stake in Equals and there is scope for a 50 per cent bid premium if a takeover is made.

To provide a little context regarding timings, here is a list of companies still under potential offer since the period commencement date (Taken from the Takeover Panel Disclosure Table): 01-Nov-2023: Equals Group plc 31-Oct-2023: Sopheon plc 18-Oct-2023: Kin and Carta plc 03-Oct-2023: TMT Acquisition plc 15-Sep-2023: Premier Veterinary Group plc 11-Jul-2023: STM Group plc 06-Jun-2023: FireAngel Safety Technology Group plc 18-Apr-2023: Advanced Oncotherapy plc 13-Apr-2023: Network International Holdings plc 12-Apr-2022: Impellam Group plc

Patience is required but the first job of management is to run the business. I hope that they don't take thier eyes off the ball with all of the takeover complexity. red

I agree patience is required as always in this type of situation. This is a solid company. The price was as high as 115p in the autumn last year well before any takeover talks were announced. So the downside risk if talks fall through is not great even if initially the price suffers short-term setback.

Shareholders just need to be patient. Another of my stocks, Smoove (SMO), was approached in April last year and the process lasted 6 months until October, with the PUSU deadline being extended for 5 consecutive months before an agreed takeover deal was finally announced in October.

I suggest that the length of time could be because a more complex deal than a takeover is being discussed. apad

do we know if we're still going to get the detailed end of year trading update next week whilst the takeover rules are in place? I hope the takeover talks haven't had any impact on growing revenue. I was hoping EQLS would beat their increased market expectations

What's the deadline for an announcement regarding a possible takeover?

How other companies, particularly those in different business sectors, conduct their affairs has little relevance to Equals. I have no idea why DX has recommended a takeover offer price, which you describe as "measley", or why their directors and major shareholders are happy to accept it since I'm not a shareholder in that company. Contextually, it is not an analogous situation to Equals. If you're a shareholder here, and you have a cynical view of the the Equals BoD, then you can always sell out.

Tomorrow is the last day In accordance with Rule 2.6(a) of the Takeover Code, by not later than 5.00 pm on 29 November 2023, each of Fleetcor Europe Limited and Madison Dearborn Partners, LLC must either announce a firm intention to make an offer for Equals under Rule 2.7 of the Takeover Code or announce that it does not intend to make an offer for Equals, in which case the announcement will be treated as a statement to which Rule 2.8 of the Takeover Code applies. This deadline will only be extended with the consent of the Takeover Panel in accordance with Rule 2.6(c) of the Takeover Code.