US private equity firm Cartesian Capital Group has declared its interest for Creston, a marketing and communications agency.
London-listed Creston, which has a market capitalisation of £26.6m, is already under offer from another US private equity firm, the identity of which is not known.
A takeover of the quoted group could trigger further take-private deals, should buyout players be able to cobble together the debt financing for the deals.
“Mid-market buyout houses are increasingly running their slide rules over listed businesses. There is no liquidity in their shares and their prices have mostly fallen,” commented Rob Donaldson from Baker Tilly.
“Some of the companies themselves are sitting there wondering why they need the quote, thinking there might be a more efficient place for them to be,” he added.
Cartesian’s approach follows its acquisition of 10% of Creston’s shares.
Creston’s board said it will not engage in talks with Cartesian until it receives an indicative offer.
Shares in Creston are up 6% to 51p with the current indicative offer believed to value the company at around £40m at between 80p and 90p per share.
In 2007, Creston generated pre-tax profits of £15m on a turnover of £81m. It shares have fallen from around the 110p mark this time last year.
Source: Thomson Merger News