- Digital learning agency agrees 100p per session – up from 236p in 2021
- The chairman and chief executive may take other offers but others may not
AIM-listed Learning Technologies has agreed to an £802million takeover by a US private equity firm after a long pursuit.
The digital learning and talent management group’s board has agreed to offer 100p per share from General Atlantic, representing a hefty 34 per cent premium to Learning Tech’s share price before the bid began in September.
But the price is high compared to Learning Tech’s 236p high set just three years ago, while the positive details of the deal have raised eyebrows among some analysts.
Broker Shore Capital said it was ‘unsurprised’ and ‘shocked by the board’s recommendation’, adding that ‘this is the wrong time to buy the business’.
Learning Technologies, which provides services to corporate and government clients, has seen its share price and profits take a hit from their 2021 highs amid a tough environment for corporate spending. .
Shore Capital said it expects ‘improved trading and a reduction in the ‘difficult decline’ in the next few years.
Analysts at Peel Hunt said the 100p price was not a ‘breakthrough price’ but Shore Capital said it was ‘not great’
Wrote earlier this year: ‘LTG is a business with high revenues and operating margins of around 20 per cent and has been designated as a ‘Strategic Leader’ in Digital Learning for eight years.
‘The organization has a very successful record of acquiring and improving operational assets.’
Under the terms of the deal, the investors were also given another option to take shares in the unnamed private equity firm – an option that Learning Tech chairman Andrew Brode and chief executive of Jonathan Satchell, who owns 24 percent of the firm, has chosen to take over.
However, the option is not open to some shareholders, such as investments and management that prevent them from owning unlisted companies.
Shore Capital said: ‘In our view, why is this a negative cost for the remaining shareholders that prevents them from holding unlisted funds.
‘In the end, the two largest shareholders have not received enough money to part with their future opportunities.’
General Atlantic, which also owns education technology firms such as Duolingo and Unacademy, said Learning Tech needs to invest more to adapt to a changing and competitive landscape.
Analysts at Peel Hunt said: ‘While we do not believe this is a knock-on price for the business, it may take some time for the shares to recover on an individual basis.’
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