Astorg, Epiris could turn to private debt for Euromoney takeover

An increasingly risk-off environment that has led to a cooling in the once booming leveraged finance market could see the FTSE 250-listed financial information publisher added to a sparse list of UK take-private deals that have been privately underwritten, opening up a new dynamic for cash-rich sponsors targeting UK plc, the advisers said.

London-based Euromoney said in a statement on 20 June that the possible cash offer of GBP 14.61 per share from Astorg and Epiris was the consortium’s fifth approach following four previous offers ranging from GBP 11.75 to GBP 13.50 per share. The proposal represents a 33.5% premium to Euromoney’s closing price on 17 June, the last full day of trading before the offer was announced.

A turn to private debt by Astorg and Epiris could help to avoid any offer for Euromoney falling victim to the same pressures that has seen other sterling-denominated deals come unstuck, one of the sources said.

Clayton, Dublier & Rice’s highly anticipated syndication of the debt package used to fund its GBP 6.6bn takeover UK supermarket group Morrisons was delayed in December as the issuer sought to ride out market volatility. The deal was then expected to launch following Morrisons’ Christmas trading update, as Debtwire reported in January. However, as market conditions worsened and sterling rates increased, the underwriters sought to offload a large portion of the debt through private placements.

Meanwhile, suitors around the sale process of pharmacy chain Boots were reported to have raised concerns about their ability to arrange financing for a buyout while markets were under pressure.

“The feedback in the market is that banks are gun-shy about underwriting leveraged debt, given market movements and fear of a recession,” one of the advisers said. Some processes on both sides of the Atlantic have seen some of the big banks go cold at a fairly late stage as their credit committees have been reluctant to commit, another of the advisers said. There is no “clear view” on the trajectory of the sterling-denominated debt market, this adviser added.

Astorg's and Epiris’s first approach to Euromoney came a few months ago, three advisers familiar with the company’s thinking said, adding that the company has been on the radar of private equity firms over the past several years. Mergermarket reported as recently as last summer that buyout group Hg contemplated taking Euromoney private in 2020.

There is no clear indication of a rival bid from another sponsor or industry player at this point, with all signs pointing towards Euromoney’s engagement with the consortium being bilateral, two of the advisers said. Still, a number of private equity firms that have signalled internal interest in Euromoney in the past are “rerunning the model” to see if their numbers stack up, one of the advisers added.

Should the offer succeed, Astorg and Epiris could split Euromoney in two, with the firm’s prized commodity price data service Fastmarkets going to one of the sponsors and the rest of the business going to the other, one of the advisers said. The appeal of Fastmarkets was said to drive much of the impetus behind Hg’s interest in Euromoney in 2020, as the sponsor also owns a minority stake in commodity data-focused competitor Argus Media, Mergermarket reported previously.

Demand for data and analytics in the commodities space has boomed in recent months as energy production, supply and consumption costs spike. One of the advisers said News Corp would be among the most logical buyers of Fastmarkets following its USD 1.15bn (GBP 942m) acquisition of S&P Global’s and IHS Markit’s Oil Price Information Services (OPIS) business in August 2021.

However, with its 'crown jewel' status, Fastmarkets is the piece in Euromoney’s portfolio that would most likely raise competition issues in a combination with some of the industry’s largest data operators, preventing them from joining the bidding, the same adviser added.

Astorg and Epiris have until 18 July to make a firm offer for Euromoney or walk away under UK takeover rules. Their proposal is subject to due diligence and will not be adjusted for the payment of a 6.1 pence per share dividend which is due to shareholders on 24 June, Euromoney said in its announcement.

Shares in Euromoney were trading on Thursday afternoon at GBP 13.90, giving it a market capitalisation of GBP 1.52bn.

Representatives for Euromoney and Epiris declined to comment, while Astorg did not respond to requests for comment.

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• Topics
• Buyouts
• UK / Ireland
• Media
• Astorg Partners
• Epiris
• HgCapital