Matthew Riley, the man in charge of perpetually hungry comms and tech titan Daisy Group, is part of a consortium that has made advances to buy the LSE-listed biz.
The group today confirmed it “received an approach” on 27 July from its largest shareholder Toscafund Asset Management LLP and Penta Capital, as well as Daisy chief exec Riley, “relating to a possible offer for the company”.
The “cash offer” was for 190 pence per share, a nine per cent premium on yesterday’s closing share price.
“An independent committee of the board has been convened who [sic] are engaged in preliminary discussions with the consortium and further announcements will be made as appropriate,” Daisy said in a statement.
In accordance with UK stock market regs – specifically the Takeover Code – Toscafund, Penta and Matthew Riley are required to either go public with a “firm intention to make an offer for Daisy” or confirm they will not seek a deal, by the 10 September.
The consortium, which already owns 51.5 per cent – entities advised by Toscafund hold a 28.5 per cent stake and Riley owns 23 per cent – said today it is at the “preliminary stage of considering a possible cash offer” for the entire share capital.
“Toscafund, Penta and Matthew Riley are not yet considered joint offerers for the purposes of the Code but are in discussions with the Takeover Panel and Daisy in respect of this matter,” the consortium stated.
Daisy has a market cap of £466.5m, and is one of the most acquisitive tech firms operating across Europe, having hoovered up 22 companies or parts of companies since flotation in 2009.
Daisy was founded by Riley in 2001, starting life as Daisy Communications, but it merged with web hosting and network service provider Vialtus in 2009 before reversing into Freedom4. Prior to merger, Daisy had acquired 24 companies.
Ian Spence, CEO at MegaBuyte, said the “official motivation for the take private is unclear” but he pointed out Toscafund owns 28.1 per cent of Phoenix IT Group, and Penta is the backer of Six Degrees, speculating on a mega merger.
“A combined Daisy/ Phoenix/ Six Degrees would have revenues and EBITDA of £650m and £100m [respecitvely] before synergies, similar to Virgin Media and behind only BT and Vodafone/ CWW in the broader-based fixed and mobile UK business comms market”.
Market talk picked up by El Chan earlier this year suggested Daisy was one of a number of companies that had held acquisition talks with Phoenix to boost its IT business, but this was prior to the arrival of CEO Steve Vaughan in the spring. Vaughan is now implementing a turnaround plan.
Riley has bigger ambitions for the tech side of the business, and just poached Logicalis Group CTO Chris Gabriel to become Daisy’s first innovation officer. He told us last week that he plans to build a mid-market powerhouse.
Analyst at TechMarketView pointed out that Daisy, like other network services outfits, is trying to replace declining voice and data revenues and branded the most recent fiscal year's outing as “disappointing”.
Despite splashing more than £35m on four acquisitions, revenues edged up by just 0.3 per cent to £352.7m in the year ended 31 March, and it reported a net loss of £15.6m, better than than prior year’s net loss of £16.4m. ®