Veda Group Ltd (ASX: VED) has announced that it has received a takeover offer from Equifax, an NYSE-listed consumer credit reporting agency.
According to Equifax's website, it organises and analyses data on more than 600 million customers and 80 million businesses around the world, with dominant positions in countries such as the United States, Canada, United Kingdom and India (amongst numerous others).
The hunter becomes the hunted
Last week, speculation was rife that Veda Group was on the hunt for acquisitions whereby it was even forced to respond to rumours it was eyeing off iSentia Group Ltd (ASX: ISD).
Now, Veda Group, which is Australia's largest data analytics business, says it has received orally a conditional and non-binding Expression of Interest from the company, whereby Equifax is proposing to acquire 100% of the group at a price of $2.70 per share. That would value Veda Group at nearly $2.3 billion.
Indeed, the offer seems somewhat opportunistic considering the heavy fall endured by Veda Group over the last six weeks or so. The shares traded at $2.48 at the beginning of August and have since retreated to just below $2.00.
Still, Equifax's offer represents a compelling 35% premium to the current price, and a 7.6% premium to Veda's all-time high price of $2.51, achieved almost 12 months ago. Veda says it will evaluate the Expression of Interest and "will update its shareholders and the market in due course".
The company said, "Irrespective of whether the Expression of Interest proceeds to an offer, the Board considers that Veda has a very attractive future and that the Company is well-positioned to continue to deliver strong growth."
What does this mean?
Again, there is no certainty that a deal between the two parties will proceed. To begin with, Veda's management believes the company has strong growth prospects and thus may deem the offer price to be too low. Then, there are also the various regulatory hurdles, including the need to gain approval from Australia's Foreign Investment Review Board, or FIRB.
Despite these obstacles, the shares emerged from a trading halt to hit a high of $2.80 – a gain of 40.4% – before retreating to $2.54, up 27.3% from yesterday's closing price.
