Communicating In A Competitive And Complex M&A Situation
Premier Farnell, a U.K. electronics products distributor, had been a long-term retained client of FTI Consulting when it received a bid from Dätwyler Holding AG, a Swiss manufacturing group, in June 2016. This bid followed the announcement by Premier Farnell of a new strategy and the appointment of a new CEO. Dätwyler valued the company at £792 million, or 165p per share, a bid that the Board of Premier Farnell supported. However, in July 2016 the company was approached by Avnet, a U.S.-based IT solutions business, which countered Dätwyler’s offer, making a 185p per share cash offer. As a result, the Premier Farnell Board withdrew its recommendation for the offer from Dätwyler and instead recommended the higher offer from Phoenix-based Avnet. Further complicating the issue, Elliott Management Corporation, the activist fund manager, took a stake in the business and during the process, the U.K. voted to leave the European Union.
Our Work With Premier Farnell
FTI Consulting employed a low-key media strategy, due to the manifold of fiduciary and political issues. The strategy also took into consideration speculation that Elliot Management might resort to bumpitrage, which it had a history of doing in similar situations.
The Avnet bid ultimately proved successful and was widely reported as good value for shareholders. Not only was the winning bid not cited as opportunistic in the context of Brexit, but Elliott Management did not turn activist.