Tribal PLC Gets Buyout Approaches

LONDON (Reuters) – British public services outsourcing firm Tribal Plc (TRBG.L) said on Wednesday it had received bid approaches and sought to assure investors it could mitigate spending cuts by helping the government make savings.

Tribal, which works with government departments, hospitals and schools, said on Wednesday: “Tribal notes the recent press speculation and confirms that it has received preliminary expressions of interest which may or may not lead to an offer being made for the company”.

The Financial Times said on Wednesday that talk of a private equity bid for Tribal at around 100 pence a share had pushed shares up on Tuesday.

Tribal declined to comment further.

Shares in Tribal climbed 20 percent after the company issued the statement, to 77 pence a share at 0915 GMT.

Tribal has hedged its bets against swingeing public sector cuts by seeking to focus its efforts on helping government departments achieve efficiencies through tactics such as outsourcing.

Some analysts have said Tribal could be well-positioned to improve earnings this way in the longer term.

“(The bid) is an interesting strategic move. If you take a longer term view, there’s a very good chance Tribal will do very well out of the government efficiency drive,” Henry Carver, an analyst at KBC Peel Hunt, said.

Another analyst, who did not want to be named, said a trade buyer would be more likely than a private equity bid because Tribal would offer exposure to a sector which was likely to do well in the long term. (Reporting by Golnar Motevalli, Editing by Rosalba O’Brien)