Martin Cole
Key Takeaways
– Euronext’s bid for Allfunds has been withdrawn, causing confusion in the market.
– The proposed takeover represented a premium on Allfunds’ share price, but Euronext’s share price dropped after the bid was announced.
– Euronext claims it dropped the bid after conducting due diligence, while Allfunds says it rejected the bid due to inadequate terms.
– The market reacted by reversing the previous gains and losses, with Euronext’s share price rising and Allfunds’ share price falling.
– Allfunds is a leading player in the fund distribution value chain, while Euronext has no previous experience in the funds market.
Euronext’s Bid for Allfunds
Euronext, a leading pan-European exchange operator, made a bid to acquire Allfunds, a B2B wealthtech platform. The proposed takeover was priced at €8.75 per share, representing a 19% premium on Allfunds’ last closing price. This move was seen as an opportunity for Euronext to expand its presence in the funds market and diversify its revenue streams.
Confusion in the Market
However, the market reacted unexpectedly to the news of Euronext’s bid for Allfunds. Euronext’s share price plummeted by 10% after the bid was announced, while Allfunds’ shares rose by 13%. This divergence in share prices raised questions and caused confusion among investors and analysts.
Euronext’s Explanation
Euronext claimed that it dropped the bid after conducting due diligence on Allfunds. The exchange operator stated that the due diligence process revealed certain issues that made the acquisition less attractive. However, Euronext did not provide specific details about the issues it encountered during the due diligence process.
Allfunds’ Rejection
On the other hand, Allfunds rejected Euronext’s explanation and stated that it rejected the bid due to inadequate terms. The wealthtech platform believed that the proposed price of €8.75 per share undervalued the company and did not reflect its true worth. Allfunds, with over €1.3 trillion of assets under administration, is a leading player in the fund distribution value chain and has a strong market position.
Market Reaction
The market reacted swiftly to the withdrawal of Euronext’s bid for Allfunds. Euronext’s share price rose by 5% following the announcement, partially recovering from the initial drop. On the other hand, Allfunds’ share price fell by 13%, erasing the gains it had made when the bid was first announced. This rollercoaster ride in share prices reflected the uncertainty and confusion surrounding the situation.
Challenges for Euronext
One of the key challenges for Euronext in acquiring Allfunds is the lack of experience in the funds market. Euronext primarily operates as an exchange operator and has limited exposure to the wealthtech sector. Integrating Allfunds into Euronext’s existing operations and achieving cost-cutting synergies may prove to be a complex task.
Conclusion
Euronext’s decision to withdraw its bid for Allfunds has created confusion and uncertainty in the market. The proposed takeover represented a premium on Allfunds’ share price, but Euronext’s share price dropped after the bid was announced. Euronext claims it dropped the bid after conducting due diligence, while Allfunds says it rejected the bid due to inadequate terms. The market reacted by reversing the previous gains and losses. Allfunds, as a leading player in the fund distribution value chain, has a strong market position, while Euronext lacks experience in the funds market. The challenges of integration and achieving cost-cutting synergies may have contributed to Euronext’s decision to withdraw its bid.
