Events and business information company, Informa PLC (LON:INF) has made a £3.9bn formal offer to buy rival UBM PLC (LON:UBM).
UBM shareholders will receive 1.083 new Informa shares and 163p in cash for each of their shares to create the world’s largest business events company with a stock market value of £9bn.
Based on Informa’s closing price of 765p on January 15, the last day before the start of the offer period, the deal represents a value of about 971p per UBM share or £3.9bn.
Informa said the deal marks a premium of 29.9% to UBM’s share price on January 15.
The offer confirms the terms of a tie-up proposed two weeks ago.
“Our recommended offer for UBM promises to create a leading B2B information services group with the international reach and market capabilities to take full advantage of these trends,” said chief executive Stephen Carter.
“The enlarged group has the potential to deliver strong growth and significant value for shareholders.”
Carter said the combined company is well-placed to deliver at least £60mln of annual recurring pre-tax cost savings with about £50mln to be achieved in the 2019 financial year.
Informa expects one-off cash costs of about £80mln resulting from the integration of operations.
The deal is estimated to be earnings accretive in the first full financial year after completion.
The enlarged group will result in cashflow strength, revenue growth and positive returns, Informa said.
Alongside the announcement, Informa and UBM updated the market on full year trading.
Informa expects to report annual results in line with expectations with 3% revenue growth, adjusted earnings per share of more than 45.5p, free cash flow of about £400mln and a 6% increase in the total dividend per share to 20.45p.
All of its four operating divisions have delivered underlying revenue growth with academic publishing up 2%, business intelligence up 2.2%, global exhibitions up 7.6% and knowledge and networking up 0.1%.