A prominent fund manager has warned that the London stock market is afflicted with a "disease" that makes being private more alluring.
According to a significant Learning Technologies Group (LTG) stakeholder who wished to remain anonymous, the company's $1 billion (£802 million) sale to US private equity was "a symptom of the wider disease" in UK public markets.
It happened as other City money managers said they were "dismayed" by the sale and that the group was being bought for a low price.
LTG, which provides online learning courses for large companies such as the BBC and Jaguar Land Rover, last week agreed to a takeover by US private equity General Atlantic.
General Atlantic, which manages $100bn of investments, offered 100p per share, which was a 44pc premium to LTG’s pre-bid share price. The LTG board said the price was “fair and reasonable”.
However, LTG’s top shareholders Liontrust and Octopus have broken ranks to criticise the deal because they say it does not reflect how much the business is really worth.
Liontrust said it was “amazed and dismayed” that the LTG board had recommended the deal, criticising the price as “uninspiring”.
Octopus, which backed LTG when it listed in London 2013 and saw it prosper when the UK stock market was in better health, also said it was worth more.
Octopus’s Chris McVey said: “We are extremely disappointed that the board has recommended the 100p cash offer which we consider in no way reflective of the true value that has been created by the team, nor of the prospects for significant future growth.”
The shareholders said LTG had been laid low by gloom engulfing companies listed on the London stock market. Businesses are struggling to prosper, with low valuations making it harder to raise equity and retain staff.
Deals announced in recent weeks, including takeovers of Renewi, Loungers and TI Fluid Systems, have pushed the number of companies exiting the market to a 14-year high.
LTG has defended its decision to sell itself, saying the takeover was a better option for shareholders than other proposals, including a break-up of the company.
The business was listed on the London stock market by founder and chief executive Jonathan Satchell a decade ago. It began with a workforce of 100 people which has since grown to 5,000 employees.
Mr Satchell and chairman Andrew Brode, who both own significant stakes in LTG, will be rolling over their shares into a privately owned vehicle run by General Atlantic. All shareholders have also been given the option of rolling over into the private vehicle.
However, Liontrust and Octopus are unable to own the private shares because of the rules around their fund.
LTG declined to comment further.
1
2
3
4
.svg)
