Euronext NV has made an indicative takeover offer to buy fund distribution platform Allfunds Group Plc for €5.5 billion ($5.9 billion) in cash and stock.
(Bloomberg) — Euronext NV has made an indicative takeover offer to buy fund distribution platform Allfunds Group Plc for €5.5 billion ($5.9 billion) in cash and stock.
The bid from Euronext values the company at €8.75 per share, Allfunds said in a statement Wednesday, after Bloomberg News reported it was exploring a bid.
The price represents a 19% premium to Tuesday’s close. Euronext has been in discussions with private equity firm Hellman & Friedman and French bank BNP Paribas SA, who own a combined 46.4% stake in Allfunds, to obtain their support for the offer.
Shares in Allfunds rose as much as 29% on Wednesday—its biggest intraday jump on record. The stock was up 18% to €8.67 at 4:02 p.m. in Amsterdam, giving the company a market value of €5.5 billion.
There can be no certainty that Euronext will proceed with an offer, according to Wednesday’s statement. The proposal is comprised of €5.69 in cash plus 0.04059 new Euronext shares, with the amount of stock subject to adjustment so the total value of the bid adds up to €8.75 per share, Allfunds said.
Other suitors including rival stock exchange groups have also looked at the asset and could still emerge as competing bidders, people with knowledge of the matter said earlier.
Platforms such as Allfunds offer investors access to a range of investment products in one place. They can require major technology investments to succeed, something that’s typically not a problem for exchange operators whose business is ensuring the smooth trading and settlement of financial products.
Allfunds, which works with almost 3,000 fund groups and has more than €1.3 trillion of assets under administration, previously attracted takeover interest from German exchange group Deutsche Boerse AG, Bloomberg News reported in 2020.
Hellman & Friedman eventually opted to list Allfunds in 2021 and retain an interest. The private equity firm acquired Allfunds in 2017 and grew it through a series of acquisitions, including a purchase of Credit Suisse Group AG’s InvestLab platform.
Exchange Deals
Paris-listed Euronext had close to 1,930 listed equity issuers and around €6.3 trillion in market capitalization across exchanges in Belgium, France, Ireland, Italy, the Netherlands, Norway and Portugal at the end of last year.
Stock exchanges have been seeking to diversify beyond traditional equity trading and generate more revenue from businesses that are less correlated to market volatility, branching into areas like data and new financial technologies in recent years.
London Stock Exchange Group Plc struck a $27 billion deal for data and trading provider Refinitiv in 2019, while Intercontinental Exchange Inc. last year agreed to buy mortgage software provider Black Knight Inc. for $13.1 billion in a bet on the future of the US housing market.
Euronext is itself no stranger to growth via acquisition under Chief Executive Officer Stephane Boujnah, an ex-banker and prolific dealmaker. It’s already expanded its footprint across Europe with deals such as the purchase of Borsa Italiana in 2021.
–With assistance from Alan Katz.
(Adds detail on exchange deals from 11th paragraph.)
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