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On 21 January 2022, Tibergest PTE Ltd a mandatory takeover offer for Photo-Me International plc. Tibergest, a newly formed company incorporated in Singapore, is wholly-owned by Mr Serge Crasnianski, CEO and deputy chairman of Photo-Me, the premium listed company which operates more than 44,600 photo booths in 18 countries worldwide.

With an already substantial 28.8% holding (108.8m ordinary shares) in the photo booth company, Crasnianski unconditionally agreed to acquire an additional 29.1m Photo-Me shares from the Dan David Foundation (DDF) at a price of £0.75 per share. As a result of the share purchase, Crasnianski will in aggregate hold a 36.5% stake (137.9m shares) in the company and is required to make a mandatory cash offer for the Photo-Me shares not already held by Crasnianski (and Tibergest) under rule nine of the Takeover Code.

The offer, which values Photo-Me at £284.5m, has been described as a ‘lowball’ offer since it represents a slight discount of approximately 0.8% to Photo-Me’s closing share price of 75.6 pence on 20 January 2022. Despite Crasnianski’s insistence that the offer is actually a premium of approximately 15.9% to the average Photo-Me share price of 64.7 pence for the three months prior to 20 January 2022, the independent committee of board members considering the deal remain unconvinced and investors to take no action until they provide a full assessment of the offer.

In providing a rationale for the offer, Crasnianski said in the :

‘[Tibergest] wishes to increase its financial interest in PhotoMe and the offer is a consequence of increasing its interest in PhotoMe Shares to above 30% of the voting rights of Photo-Me through the acquisition. The offer also provides Photo-Me Shareholders with a liquidity opportunity on no less favourable financial terms as those provided to DDF by virtue of the Acquisition. Given the low level of trading in Photo-Me Shares, Bidco considers this liquidity event to be beneficial to Photo-Me Shareholders.’

The takeover bid is supported by two other Photo-Me executive directors, Jean-Marc Janailhac, who is acting as advisor to Mr Crasnianski in connection with the offer and is therefore a concert party of Tibergest, and Crasnianski’s daughter, Tania Crasnianski. Consequently, both Tania and Jean-Marc have been excluded as part of the independent directors of Photo-Me considering the terms of the offer.

Crasnianski’s offer, backed by his daughter, comes at a time when individuals/family offices involved in takeovers bids have become an increasing feature on public to private (P2P) transactions throughout 2021. This is a trend we expect to continue in 2022 as there is no reason to believe that the appetite of individuals/family offices to make bids for valuable target companies will diminish. In 2021, seven of the P2P transactions announced involved bidders backed by individuals/family offices, including Bill Gates on the £3.5bn consortium offer for Signature Aviation (see: Global Infrastructure Partners take the lead on Signature Aviation bid), the Rothermere family on the £2.7bn offer for Daily Mail and General Trust (see: Rothermeres to bring Daily Mail under family control in £2.7bn deal) and Radovan Vitek on the £1.4bn offer for Globalworth Real Estate Investments (see: Globalworth Real Estate Investments board reject offer from its largest shareholders). This has continued into 2022, with ‘software queen’ Vin Murria’s possible offer for M&C Saatchi plc (see: M&C Saatchi snubs initial reverse takeover approach from tech magnate Vin Murria), the most recent to hit the headlines. 

Commenting on this trend in our Trends in UK Public M&A trend report, Selina Sagayam, Partner at Gibson Dunn & Crutcher LLP, notes:

‘When we look at who is buying, what we have seen in terms of increasing interests from the investment management sector (PE firms, pension funds, sovereigns, corporates, family offices and UHNWs) reinforces the ‘hunt for alpha’ which has burst on to the scene in 2021 in full force following the worst effects of the pandemic being felt in 2020 across the global economy including the M&A markets. Whilst consortium bids by definition are more complex to organise on the buy-side, the value of the fire power and the attractiveness of diversification of risk has brought focus in this area and we have seen that over 30% of P2Ps for example were consortium bids with nearly a quarter (!) including individuals or family offices – the latter market having become more sophisticated and skilled and correspondingly diversifying beyond managed investments in public markets or VC/ PE investments into the public markets.’

Market Tracker will continue to monitor this transaction as it develops.