Previously, discussions did not work out between Allfunds’ current owners, including Hellman & Friedman and CVC Capital Partners, since they had different views about valuation.
European fund distribution platform Allfunds Group Plc has recently attracted a lot of attention through acquisition discussions, especially from major financial institutions. Among them is Deutsche Börse AG, which has discussed entering into exclusive negotiations to potentially acquire Allfunds. The current offer that Deutsche is making to Allfunds is around €5.3 billion. It is bid with a blend of cash and the company’s shares.
This is a significant value for Allfunds shareholders, as the price per share is above the company’s recent market value, indicating the premium the company is willing to pay.
If the proposed deal is completed, the UK-based company will receive cash and newly issued shares in Deutsche Börse with dividends. The board of directors at Allfunds has given its unanimous approval during the exclusive discussions.
The representatives of both Allfunds and Deutsche Börse, as well as their key shareholders, did not comment on the discussions.
When an announcement about these discussions was made, it had a tangible impact on the market. The share price of the company rose sharply on the Amsterdam exchange amid increased investor interest in the potential deal. Deutsche Börse’s shares have also gone through a movement as the market was anticipating this potential deal.
Many other companies, other than Deutsche Börse, are interested in the UK-based company. Other financial institutions were private equity companies such as CVC Capital Partners, which also made an offer to them.
Previously, discussions did not work out between Allfunds’ current owners, including Hellman & Friedman and CVC Capital Partners, since they had different views about valuation.
It is a leading platform for fund managers and distributors. It offers a range of services, including trade execution, analytics, and compliance solutions. They have a technological infrastructure that enables their clients to access, screen, and transact through investment funds from a centralised location, while also providing essential reports for asset tracking and monitoring fund flows. As of late September, Allfunds managed assets worth €1.7 trillion.
It is currently owned by Hellman & Friedman and BNP Paribas. They have close to half of the company’s equity. Any prospective buyer who might buy in the future would need the support of those companies to move the deal forward. These stakeholders influence the company’s strategic decisions, and they have historically rejected bids that do not align with their vision for Allfunds’ future growth potential.
This is not the first time potential buyers have approached Allfunds. Two years ago, the company considered a deal with private equity investors but ultimately walked away from those talks because it was not happy with the terms offered. Deutsche Börse was interested in Allfunds in 2020, before Allfunds decided to go public. Euronext NV also approached the company in 2023, but the deal was called off as well.
There is uncertainty about the outcome of the deal despite the exclusive nature of the current negotiations with Deutsche Börse. There is a possibility that terms may shift or that no agreement will be reached, given the complexities of transactions of this size and importance. Both parties are moving cautiously, mindful of the need to balance shareholder interests and strategic objectives.
Allfunds is an essential technology provider in the European financial industry. Its platform and assets under administration make it an attractive target for institutions seeking to expand their fund distribution reach. The coming weeks will be critical to determining whether Deutsche Börse’s deal for Allfunds will result in a landmark deal that reshapes Europe‘s asset management infrastructure.