The takeover bandwagon is picking up speed as the year progresses with deals seemingly now being announced each week.
On 9 June US chipmaker Qualcomm (QCOM:NASDAQ) agreed to take over Alphawave IP Group (AWE), which designs high-speed data transmission technology and licences it to semiconductor designers and manufacturers, much like Cambridge-based ARM (ARM:NASDAQ), once the UK’s biggest listed tech company.
In fairness, Qualcomm made its initial approach in March, and it has taken this long to work out a deal due to the complicated nature of the financing.
As well as offering 183p in cash, almost double Alphawave’s undisturbed share price three months ago, Qualcomm is offering new shares and exchangeable securities which are unlisted and can only be converted into stock on set dates.
On the same day FTSE 250 precision measurement firm Spectris (SXS) revealed it had been approached by US buyout firm Advent with an offer of £37.65 in cash, a premium of almost 85% on the undisturbed share price.
Unlike the Qualcomm/Alphawave deal, there are no synergies to extract or revenues to cross-sell, Advent is simply buying the business and will sweat the assets.
Even the until-recently unloved real estate sector is getting in on the action, especially ‘beds and sheds’, with another US buyout giant, KKR (KKR:NYSE), locking horns with Primary Health Properties (PHP) as the pair vie to take over primary health care facilities owner Assura (AGR).
Both firms are offering a price which represents roughly the net asset value per share of Assura’s portfolio, the only difference being if KKR wins yet again there are no synergies or benefits, whereas a combination with PHP could unlock savings and would enable investors to continue their interest in a larger, more valuable business.
In the logistics sector, following last year’s merger of UK Commercial Property (UKCM) with Tritax Big Box, mega-shed operator Warehouse REIT (WHR) has agreed to be taken over by US group Blackstone (BX:NYSE) for £470 million after months of to-ing and fro-ing and questions over the valuation of one of its key assets.
And Unite Group (UTG), one of the UK’s largest providers of purpose-built student accommodation, has confirmed it had made an approach to rival Empiric Student Property (ESP) with a cash and shares offer.
Unfortunately for Empiric, the premium to the undisturbed share price is a measly 10%, although Unite insists synergies could be unlocked through its operating platform, delivering earnings accretion and shareholder returns while keeping a strong balance sheet.
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