One of the London stock market’s largest exhibition groups is in talks about a big capital injection that would further underline an ongoing frenzy of private equity interest in UK plc.
Sky News has learnt that Hyve Group is in preliminary discussions with Carlyle about a so-called private investment in public equity – or PIPE – deal.
Hyve is understood to be holding the talks with Carlyle as one of several options for raising capital to finance growth opportunities as the global events industry rebounds from the pandemic.
City sources said this weekend that the discussions were far from certain to lead to a deal.
PIPE deals have been infrequent in the London market, with Clayton Dubilier & Rice’s investment in the building materials group SIG a year ago representing an outlier.
Carlyle is said to be discussing injecting between £200m and £250m into Hyve.
Any such deal would require shareholder approval, and could elicit opposition from institutional investors who helped to shore up Hyve’s balance sheet in June 2020 through a £126m rights issue.
Other options being evaluated by Hyve’s board were unclear this weekend.
Formerly known as ITE, Hyve was launched as an international introduction service for Russian businesses following the collapse of the Soviet Union.
It operates prominent trade shows such as Mosbuild, a building and interiors fair in Moscow which was staged this month after having its 2020 event cancelled because of the COVID-19 outbreak.
Other exhibitions in Hyve’s portfolio include Shoptalk, Bett and Mining Indaba, an African resources conference attended by executives from around the world.
The company recently acquired Retail Meet-up, a digital networking platform which underlines a likely post-pandemic evolution of the international events industry.
People close to Hyve indicated that if it did pursue a new capital-raising, the proceeds would be used to finance further corporate acquisitions.
Its balance sheet has been strengthened by more than £60m of insurance payouts during the current financial year, it said as part of a half-year results statement this month.
“Having run events in Russia, Ukraine, China, Turkey and India in [the first half], we are optimistic that events in Western economies will run in the second half, in line with our modelled scenarios,” Mark Shashoua, Hyve’s chief executive, said.
“Continued customer rollover for Western events provides confidence in the pent-up demand for market leading in-person events, which Hyve is well positioned to serve.”
The talks between Carlyle and Hyve come during an intensive period of private equity deals involving London-listed companies as buyout firms capitalise on opportunities to take businesses private at attractive valuations.
This week alone, Carlyle itself agreed a £960m takeover of healthcare group Vectura, while Siris Equity clinched a long-running bid to buy Equiniti, the support services provider.
On Friday, it emerged that aerospace group Senior had rebuffed an approach from Lone Star Funds, while Cinven saw a further offer for Sanne, a fund administration services company, rejected.
The infrastructure firm John Laing and property developer St Modwen have both recommended takeover offers from private equity firms in the last month.
The flurry of dealmaking is causing consternation among fund managers who believe that they are effectively being forced to sell listed companies too cheaply.
This week, the Daily Mail launched a front-page campaign against what it called the predatory instincts of private equity executives.
Hyve and Carlyle declined to comment on Saturday.
Shares in Hyve closed down 0.9p at 131.4p on Friday, giving the company a market value of just under £350m.
Its value has rallied by 20% during the last 12 months.
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