Corporate Strategy & Finance - Review

    June 2009

    Take Private

    The last 12 months have seen a relative increase in the number of approaches to public companies by private equity backed bid vehicles (Bidder). Hammonds LLP has acted on a number of such transactions, including the take privates of SSP Holdings plc and Ascribe plc. A number of factors have triggered the recent popularity of these transactions:

    • depressed stock market valuations leading to cheaper deals, which is helped by listed company valuations having fallen more visibly than those of their privately held counterparts.
    • companies feeling undervalued and very much at the mercy of market sentiment, which may compound the feeling of management that the regulatory burden is now disproportionate to the benefits which can be derived from remaining public.
    • private equity houses are sitting on funds that they are able to invest.

    Private equity investors have their own investment criteria. Not every company is a suitable target and, as with all private equity backed transactions in the current market, another obstacle is bank funding.

    In May 2008, international law firm Hammonds became a limited liability partnership. Hammonds LLP and its affiliated undertakings has offices in Birmingham, Leeds, London and Manchester in the UK, and in Berlin, Brussels, Beijing, Hong Kong, Madrid, Munich and Paris.