Dutch private equity firm Waterland has ended its agreement to act in concert with UK telecoms provider Giacom in relation to a potential takeover of Gamma Communications, while leaving open the possibility of pursuing its own bid for the company, according to Private Equity Wire. Waterland said it was no longer acting in concert with Giacom but would continue to assess its interest in Gamma, according to Private Equity Wire. Waterland cautioned that there was no certainty it would proceed with a formal offer, according to Private Equity Wire.
Epiris agreed price sets a benchmark for any new bid
Gamma agreed earlier this month to a 1,120 pence-per-share takeover proposal from private equity firm Epiris, valuing the UK telecommunications company at approximately £1.08bn ($1.46bn), according to Private Equity Wire. The end of Waterland’s concert party arrangement comes after Gamma accepted Epiris’ proposal, according to Private Equity Wire.
A sale process that has drawn multiple sponsors
Gamma has attracted interest from a number of buyout firms during an extended sale process, according to Private Equity Wire. Oakley Capital and Providence Equity Partners were among those to pursue the company before withdrawing their approaches in June, according to Private Equity Wire.
Waterland and Giacom had emerged as potential alternative bidders in August, when Gamma disclosed that the two companies were acting in concert over a possible transaction, according to Private Equity Wire. Under the arrangement, Giacom was considering acquiring certain business units from Gamma as part of a wider deal, according to Private Equity Wire.
Market pricing reflects expectations of a competing proposal
The latest development follows reports that Waterland could be preparing an offer worth more than Epiris’ agreed bid, according to Private Equity Wire. A Waterland move above the agreed price would potentially reopen a takeover contest that appeared to have been resolved when Gamma accepted Epiris’ proposal, according to Private Equity Wire.
Gamma shares were trading at 1,141 pence on 11 September, around 2% above Epiris’ offer price, reflecting expectations that a competing proposal could still emerge, according to Private Equity Wire.
Widely known context: In UK public-company takeovers, a higher competing proposal can lead to a renewed bidding process and updated disclosures as bidder intentions change.
