Ashtead Technology is set to become the latest company picked off the London Stock Exchange after agreeing to a £505m takeover by a New-York based private equity firm.
Ember Infrastructure Management agreed to pay 615p per share in cash for the underwater technology firm.
This represents a staggering 80.9 per cent premium on Ashtead’s closing share price of 340p on 22 September.
The group’s board considered the acquisition to be “fair and reasonable” and a “compelling opportunity” for shareholders. The board plans to vote their own shares in favour.
It recommended shareholders vote in favour of the deal, which is anticipated to be completed in the fourth quarter of 2026 or early next year.
Ember’s appeal
Bill Shannon, chairman of Ashtead Technology, said “In recent years, Ashtead Technology has demonstrated resilience despite a challenging market and geopolitical backdrop.”
“The board believes that the acquisition… provides shareholders with a compelling opportunity to realise significant value today when compared with the risk-adjusted return that would be expected to be delivered through the standalone strategy.”
Ember, whose portfolio consists of mid-market infrastructure companies, said it would support Ashtead through “providing long-term private capital” to invest in its fleet, technology and people.
Ashtead’s share price has rocketed 71.6 per cent since the start of the year.
Surging premiums
The deal marks yet another London firm being snapped up at a soaring premium. Ember’s 80.9 per cent offer, came just behind Easyjet’s 81 per cent premium, after the budget airline was acquired for £5.7bn by Apollo.
Engineering group Rotork was plucked off the mid-cap index earlier this year for £4.1bn at a 73 per cent premium.
Private equity firms and companies have also been circling large cap stalwarts. Insurer Beazley was poached by Zurich for £8.1bn at a 59.8 per cent premium, while Nuveen snapped Schroders for £9.9bn at a 34 per cent premium.
The deals, combined with the ongoing IPO drought, are increasing concerns the market is shrinking. But the capital received a shot in the arm last week, after African mobile payments company Airtel listed at a £5.3bn valuation.