Providence Equity, a U.S. investment fund, recently recommended a cash offer price of 108 pence per share to acquire Hyve, a UK-based organiser of business-to-business exhibitions and events. The proposed takeover would value Hyve at approximately £320m ($392.83m).
Hyve has been struggling amid the COVID-19 pandemic, with many of its exhibitions and events cancelled or postponed. The company’s revenue for the year ending September 2020 was down by 83% to £49.5m, compared to £291.9m in the previous year.
Providence Equity’s recommendation comes after it conducted a thorough review of Hyve’s operations and financial performance. The U.S. investment fund believes that Hyve has the potential to recover once the pandemic is under control and the events industry resumes its growth trajectory.
Hyve’s Response to the Recommendation
Hyve has confirmed that it has received Providence Equity’s recommendation and is currently considering its options. The company’s board of directors has not yet made a decision on whether to accept the offer or not.
Hyve’s shareholders may also have their say in the matter. The company’s largest shareholder, investment firm Oceanwood Capital Management, has a 42% stake in Hyve and will need to give its approval for any takeover to proceed.
What the Takeover Could Mean for Hyve
If the takeover proceeds, it could provide Hyve with the resources it needs to recover from the pandemic and pursue its growth strategy. Providence Equity has a strong track record of investing in businesses and helping them to achieve their full potential.
Providence Equity’s expertise in the events industry could also prove valuable to Hyve. The U.S. investment fund has previously invested in businesses such as Clarion Events, which organises events in industries such as gaming, energy and security.
However, some analysts have raised concerns about the price of the proposed offer. The 108 pence per share price represents a premium of just 10% on Hyve’s current share price, which some experts believe undervalues the company.
Conclusion
Providence Equity’s recommendation to acquire Hyve at a valuation of £320m through a cash offer of 108 pence per share could be a significant development for the events organiser. However, Hyve’s shareholders and board of directors will need to carefully consider the offer before making a decision.
The events industry has been hit hard by the COVID-19 pandemic, but many experts believe that it will recover once the pandemic is under control. If the takeover proceeds, Hyve could be well-positioned to benefit from the industry’s recovery with the support of Providence Equity’s expertise and resources
