US private equity bowls over another London-listed operation
Bowling operator Ten Entertainment Group looks set to be picked up by an American private equity firm in a deal worth close to £300m.
Trive Capital Partners, a Texas based group, has entered into an agreement to buy the London-listed operator – which operates out of 52 sites across the UK – for £287m, a 33 per cent premium on last night’s closing price.
The British bowling group is the latest firm to be taken private, joining Hotel Chocolat which was bought out by Mars in a £534m deal last month.
Sky News’ Mark Kleinman first reported the approach.
US private equity firms have been raiding the London markets over the past year or so due to a combination of underpriced valuations and a still-weak pound.
Adam Bellamy, the chair of TEG, said: “TEG is one of the UK’s largest listed leisure businesses, with a highly capable management team and a strong track record of growing sales and profit. In particular, since reopening after the Covid pandemic, TEG has achieved record results with Group Adjusted PBT of £26.1m delivered in FY22.”
“I am confident that the growth strategy we have in place for the business will continue to deliver for all our stakeholders.”
He added: “However, whilst TEG has performed well in the public markets in comparison with its peers, the Acquisition provides all TEG Shareholders with the opportunity and certainty of an exit which I believe recognises the underlying value in our business.”
The company‘s share price soared over 31 per cent this morning as the London market responded to the news.
Russ Mould, investment director at AJ Bell, said: “Ten Entertainment is a classic example of stock that has traded on a cheap valuation and delivered decent results, yet has remained under the radar of many investors.
“Given the market hasn’t recognised its true value, it’s no surprise that a private equity-backed vehicle has come along and tabled an offer which looks too good to refuse, hence why the board has recommended it.”
He added: “Ten Entertainment is the perfect example of why some investors like to fish for opportunities in the small cap space.
“The business has been ticking a lot of the right boxes for years, albeit disrupted by the pandemic. There were plenty of signs it was a well-run business and its decision to offer bowling at affordable prices during the cost-of-living crisis has proved wise.”
“Assuming the takeover completes, it will be yet another loss to the UK stock market which still isn’t replenishing the pot with new IPOs.”