Legal services provider DWF (LON: DWF) is the best performing company on the Main Market following a bid approach by Inflexion Private Equity Partners. The offer is 97p/share and the market price jumped by one-third to 87.2p. Shareholders would also receive a 3p/share special dividend if the bid goes ahead.
Shareholders would also be given the option to receive a partial loan note alternative with 65% in loan notes and/or preference shares and 35% in cash. There is also an option to reinvest 40% of the cash proceeds in loan notes or preference shares.
The business is split into four divisions: commercial services, insurance, international and connected services.
History
Back in March 2019, DWF was the first lawyer to float on the Main Market – the rest are on AIM. It raised £75m at 122p/ share, which valued DWF at £366m. After a strong start the share price slumped in 2020 – probably due to the end of the one-year lock-in following flotation – before recovering. However, there has been a downward trend since the beginning of 2022.
Dividends paid since flotation total 15.1p/share. Last year, 4.75p/share was paid.
Zeus trimmed its 2022-23 pre-tax profit forecast by 4% to £44.1m but maintained the following year at £54.2m. Taking the total potential consideration as 100p/share, the prospective 2022-23 multiple is less than ten, falling to nine. That compares with a multiple of 20 when DWF floated.
That rating is higher than for some AIM rivals, such as Knights Group Holdings (LON: KGH), and similar to Gateley (LON: GTLY).