The private equity sweep on the London Stock Exchange shows no signs of abating after a radiology firm yesterday became the latest to receive an offer.
London based private equity vehicle IK Partners tabled a £269million bid for Medica, which provides services to NHS radiology departments.
Takeover fever has hit the City in recent weeks as private equity firms have gone hunting for cheap deals.
Takeover target: London based private equity vehicle IK Partners tabled a £269m bid for Medica, which provides services to NHS radiology departments
There have also been concerns that the London market is losing its allure to businesses, as many have been eyeing listings in New York.
Medica’s board has urged shareholders to back the takeover swoop, which it said would allow investors to realise their shares ‘at a value that reflects the future growth potential of the business.’
Its suitor believes Medica will be ‘better able to achieve its full potential in a private market setting’. At 221p per share, the bid represents a 32 per cent premium to Medica’s closing price on Friday.
And shares in the East Sussex-based company shot up 33.8 per cent, or 54p, to 214p.
IK Partners, founded in 1989, has a track record of investments in healthcare companies, with its portfolio spanning across Europe.
Medica posted a 12 per cent boost to profit last month, which may explain why it was an enticing option for a take-private deal, the analyst added.
And the latest private equity raid was ‘fresh evidence’ that UK firms were seen as bargains, according to Susannah Streeter, head of money and markets at Hargreaves Lansdown.
UK assets have been ‘weighed down by the weaker pound and the stagnating UK economy’, and a frenzy of private equity activity could pick up even more momentum as the year continues, Streeter said.
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