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Highlights
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Peel Hunt considers General Atlantic's £1 per share offer for Learning Technologies Group PLC too low, suggesting a valuation closer to £1.30 per share.
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The brokerage anticipates improved business performance as economic conditions improve, believing the current offer undervalues the company.
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Learning Technologies Group has indicated a willingness to recommend the offer from General Atlantic, which has a strong track record in tech investments.
General Atlantic's Offer for Learning Technologies Group Viewed as Low by Peel Hunt
Broker Peel Hunt has expressed concerns regarding General Atlantic's £1 per share, £800 million offer for Learning Technologies Group PLC {LSE:LTG} deeming it insufficient. In a recent note to clients, Peel Hunt highlighted that the valuation of 7.7 times underlying earnings does not accurately reflect the potential for improved performance as economic conditions are expected to stabilize.
The brokerage stated that despite facing some challenges, the current offer is unlikely to receive full support from investors. They suggested that a more appropriate acquisition multiple would begin at 10 times earnings, which would translate to a valuation nearer to £1.30 per share.
Following the announcement, Learning Technologies Group's share price saw a significant increase, rising 28% to 96p before market close, and hovering around 95.7p at midday.
LTG, known for providing digital workplace training to government and corporate clients, has indicated that it is inclined to recommend General Atlantic's offer. The American private equity firm, managing $83 billion in assets through its Atlantic Park fund, has a history of investing in high-growth companies, including Alibaba and ByteDance. Recently, it completed a $2 billion acquisition of Norwegian ed-tech company Kahoot.
As discussions continue, market participants will be watching closely to see how the situation develops and whether General Atlantic will adjust its offer in response to market feedback.
