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Private equity groups led by Permira and Blackstone have offered to take Norwegian online classifieds company Adevinta private, in a €14bn proposed deal that would rank as the second-biggest leveraged buyout this year.
The offer price of NKr115 per share is more than 50 per cent above Adevinta’s average share price over the three months before reports of a possible deal emerged in September. It values the company at about €14bn including debt, the company said on Tuesday.
Oslo-listed Adevinta’s board did not formally recommend the offer but said it was worth considering. “The company over time can generate greater value than what is reflected in the cash consideration,” the board said in the statement, but it added “the cash consideration is within the range of what is fair”.
The consortium has secured a commitment from investors representing more than 72 per cent of the company’s outstanding shares to selling their stock when the offer is completed, according to Adevinta’s statement.
Large buyouts have been scarce this year as private equity groups adapt to higher borrowing costs and ongoing geopolitical uncertainty. In the first half of the year, the number of deals worth more than $1bn globally was on track to be the lowest since 2019, Standard & Poor’s data shows.
In July, US financial technology group Fidelity National Information Services agreed to sell a majority stake in its merchant payments arm Worldpay to private equity firm GTCR in a $18.5bn deal, this year’s biggest buyout.
Adevinta, which was spun out of Norwegian media company Schibsted in 2019, operates websites across Europe. In 2020, the company merged with eBay’s classifieds business. That deal created the world’s largest online classified advertising business and made eBay the top shareholder in Adevinta.
Ebay said it would sell half of its shares in Adevinta for about $2.2bn, while exchanging the rest for an equity stake of roughly 20 per cent in the privatised company.
Permira, which is already a shareholder, would increase its stake and become the company’s largest shareholder with about a third of the shares, in what has been a money-losing investment so far. The London-based buyout firm bought about 10 per cent in Adevinta in July 2021 at NKr157 a share. The stock halved in the following months, before recovering as takeover interest emerged.
Permira is joined by Blackstone, General Atlantic and TCV in funding the deal. Schibsted will also continue to remain a shareholder after the company is delisted, with 14 per cent of the shares.
The bid is taking place against a challenging market backdrop. Since Adevinta confirmed it had received an interest from the buyout consortium in September, conflict in the Middle East has erupted and interest rates have remained high, making the cost of financing a deal expensive.
Permira and Blackstone turned to private credit to finance the takeover with a €4.5bn loan, said people with knowledge of the details.
Leveraged buyout groups have increasingly tapped direct lenders as volatility and lacklustre demand in public markets has curbed the willingness of banks to underwrite takeover debt.
The Adevinta funding package, financed by lenders including Blackstone’s credit arm, Singapore’s sovereign wealth fund GIC and Sixth Street Partners, ranks among the largest loans ever cut by direct lenders.
It eclipses a $3.8bn loan Hellman & Friedman and Permira raised to fund their buyout of Zendesk in 2022. Finastra clinched a $4.8bn loan this year to refinance its existing debts, according to PitchBook LCD data.