US private equity swoops on British event organiser Hyve in £481m deal

Private equity plunged into another British company battered by the pandemic.

US-based Providence Equity Partners has agreed to pay 108 pence per share for event organizer Hyve, worth £481 million.

The deal sent shares in the London-listed company, which is behind exhibitions such as fashion fair Pure London, up 10.4 percent, or 10.4 pence, to 110 pence.

That was above the level of Providence’s bid, suggesting investors believe a rival bid may follow.

But it is still 80 per cent below pre-Covid levels, fueling fears that British companies are being snapped up cheaply by foreign predators in the aftermath of the pandemic.

Interest in takeovers in UK companies increased during Covid as bidders sought to take advantage of low price tags in a wave of ‘pandemic looting’.

G4S, the AA, Morrisons and Ultra Electronics are among the companies that have been sold in recent years.

Danni Hewson, head of financial analysis at AJ Bell, said the Hyve deal was another example of private equity ‘snaking a British bargain’.

She said: ‘Hyve is perfectly positioned for real growth, but with money getting more expensive it’s probably no surprise that it’s looking for a sure bet to expand further and faster than it otherwise would have.

“And the board has pushed for what it felt was a fair price for the company in today’s tough economic climate, but a fair deal today looks cheap when you look at past performance.”

The acquisition means Mark Shashoua, Hyve’s founder and CEO, could earn as much as £1.2 million from the deal, based on his unacquired shares in the company.

A number of Hyve directors and major investor Strategic Value Partners have already backed the deal, meaning Providence has the approval of shareholders who hold nearly 17 percent of the voting rights.

Hyve Chairman Richard Last said, “The board believes the offer represents value for shareholders and that Providence, with their industry knowledge and belief in the business and management team, will be a good partner for Hyve.”

If approved by shareholders, the deal would close in May and the company would be delisted from the London Stock Exchange.

Hyve, formerly International Trade Exhibitions, was founded in 1991 by the Shashoua family, who wanted to benefit from the transition of the former Soviet Union to a market economy.

Nearly all of its exhibitions now take place in advanced economies, having sold some global operations in the past year.

But Hyve’s shares have failed to recover since the £900bn events industry ground to a halt at the start of the pandemic.

This was exacerbated by the war in Ukraine and Hyve’s decision to dump its Russian operations in response.

But things are slowly picking up, with operating income in the 12 months to September 2022 at 90 percent of pre-Covid levels, with the second half of the year at 110 percent.

The US private equity group said: “Providence believes Hyve has created a strong platform for future organic and inorganic growth, supported by Hyve’s portfolio of high-quality global brands and market-leading events focused on developed markets and growing industries.”

Providence’s portfolio includes a majority stake in New York-listed software company Double Verify and control of the franchise arm of Spanish football giant Real Madrid.