On Wednesday, in a statement KKR, a private equity firm, said it aims to acquire John Laing Group in a deal that values the British infrastructure investor at around $2.84 billion (2 billion pounds).
The development makes John Laing the latest British company to be taken private since London-listed firms carry a discount to global peers, undermining the value of staying public.
“Under private ownership and with flexible access to capital, John Laing can take a longer term view as an owner and operator of assets during the next phase of its growth,” said Tara Davies, KKR’s Co-Head of European Infrastructure.
John Laing’s shareholders will receive 403 pence per share in cash, representing a premium of 27% to the stock’s close on May 5, the day before the company confirmed it was in takeover talks.
With the news reaching the market, John Laing’s shares surged by 11.4% to 402 pence, just below the offer price. Since the beginning of this year, they have gained 22% in value.
For the year ending Dec. 31, 2020, it reported a loss before tax of 65 million pounds compared with a loss of 95 million pounds a year earlier.
With the UK investing heavily in infrastructure projects, the company stands to benefit.
“KKR is a strong partner, providing long-term capital and global expertise to accelerate John Laing’s strategy,” said John Laing Chairman Will Samuel.
John Laing aims to recommend shareholders to back the deal.
KKR said it has agreed to partner with infrastructure investor Equitix, which will buy a 50% stake in the British company’s existing asset portfolio.
According to a source who is close to the deal, the company will continue to be operated from the United Kingdom by the existing management.
($1 = 0.7046 pounds)