News & Analysis

LSE-listed Equiniti stock rockets to 12-month high as buyer makes bid

Andrew Saks, Friday, 28 May 2021

British administration and financial outsourcing company Equinit PLC is a quiet contender on the stock market, having been publicly listed on the London Stock Exchange's main market since its Initial Public Offering (IPO) in 2015.

Whilst the name Equiniti is perhaps less well known, its origins lie within one of the world's largest retail banking and financial services companies, whereby the share registration business of Lloyds TSB was bought by Advent International, a private equity institution, in 2007.

In its present form, the company's services include share registration arrangements for listed companies, outsourcing of complaints management and administration and payment services for pension scheme.

For those whose eyes have not yet glazed over and are still able to consider a type of business that makes actuarial services appear exciting by comparison, the until now innocuous company has become the subject of interest of a potential buyer.

As a result, the share price has risen sharply this morning to its highest point in over a year. At 8.00am this morning, Equiniti stock languished at its ordinarily steady price of 179.86 pence per share and has now risen to 180 pence per share.

That may appear a miniscule amount in monetary terms, however the steep upward direction displayed on this morning's graph shows that news of a possible investment has raised confidence in an otherwise stagnant stock.

Having been quietly approached in February, Equiniti has now agreed a £673million deal with New York-based Sirius Capital which would represent an acquisition rather than a capital injection.

Philip Yea, Chairman of Equiniti, said "I believe that the proposal from Sirius can provide support for EQ's future development through continuing investment in the people, technology and products so critical to our loyal clients."

Shareholders will each receive 180p per share, which represents a 56 per cent premium on the closing price of 116p on February 8, when bid interest began. Shares in Equiniti were up 6.5%, or 11p, at 179.4p on the announcement of the proposed deal.

Equiniti has various locations in the United Kingdom, including a head office in Broadgate Tower in the City of London and a large center in Crawley, Sussex, very close to the old Black Horse Financial Services administration center in the days when Lloyds Bank owned various subsidiaries along with what is now Equiniti, and international offices in North America, Poland and the Netherlands.

The company, now rebranded as EQ, owns the share registration business of North American banking giant Wells Fargo, and also has an Indian offshore arm, opened in Chennai in 2014.

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