There has been a number of private offers for publicly listed companies in Ireland and the UK recently.
In the last the week we have seen a management company buy out a listed company in the case of Irish Ferries owner Inter Continental Group (ICG).
Another Irish company DCC Energy delisted in the UK as it agreed a takeover from two US private equity firms KKR and Energy Capital Partners.
PTSB will be delisted if shareholders vote to approve its €1.2 billion acquisition by Austrian group BAWAG – that vote is due at an Extraordinary General Meeting tomorrow.
Budget airline Easyjet was recently in talks with private equity firm Apollo Global Management which topped a previous proposal from rival Castlelake, while UK testing and certification company Intertek agreed to be taken private by Swedish investment firm EQT in June.
Read more
DCC Energy agrees £5.75 billion takeover by KKR, Energy Capital
Irish Continental Group’s shares jump 27% on €1.2 billion management-led buyout
So why is there a phenomenon of public to private deals?
In the case of both ICG and DCC Energy, private money has the funding to give the companies more of a value than the public market is potentially putting on them, according to Business Post Correspondent Kathleen Gallagher.
Over the years some of the bigger companies have delisted in Ireland and moved to the US.
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Some of the largest stocks on the Irish market, CRH and Flutter Entertainment, left for the more liquid capital markets of the US where there are higher trading volumes and activity as well as better price stability.
Now we are seeing a number of the more medium and smaller companies kind of being taken out by private.
Speaking on RTE’s Morning Ireland, Ms Gallagher highlighted that the big problem here is not that these companies are moving on, it is that we’re not seeing these new listings come through.
“That really raises the question over what is the purpose of the Irish stock exchange, particularly if you’re thinking about a unified European capital markets going forward,” she said.
She believes the listing on the Irish stock market “doesn’t have the prestige it used to.”
“EuroNext is tackling and speaking private equity firms that have these companies that maybe would have listed in the past, they say their founders aren’t that interested in listing,” Ms Gallagher explained.
“They can get the capital privately without having the scrutiny and the rigour of the public market, which requires quarterly reporting and putting executive salaries out there,” she added.
She also said that EuroNext is trying to do different initiatives to attract companies to list such as the EuroNext Access Index to support the growth of smaller companies and SMEs.
“They did have a company list on that at the end of last year and had this expectation that six more would come onto that market this year. We haven’t seen that yet, but it might happen at some point,” she added.
