06/01/2012 Author: Will Wainewright

GlobeOp in private equity takeover talks

GlobeOp, among the ten biggest hedge fund administrators, is in takeover talks with two private equity houses and has appointed an advisor to undertake a strategic review and maximise shareholder value.

The company revealed in a statement that both Advent International Corporation and TPG Capital were participating in discussions to take over GlobeOp, but that they remained at a “preliminary stage”.

Evercore Partners has been appointed to advise on a strategic review, fuelled in part by the board’s belief that the “company's share price significantly undervalues its future prospects” given its “continued strong growth”.

GlobeOp is the sixth-largest hedge fund administrator, according to HFMWeek’s single manager survey in November, with $171bn under administration.

But its share price was badly hit during August’s market sell-off and has hovered between 260 and 300 during the last few months after reaching a peak of around 420 last summer.

GlobeOp chairman Ed Nicoll, said: “GlobeOp is performing extremely well and we are confident of continuing the strong growth of the business under our current ownership structure. Nevertheless, the Board felt it right to explore options which could enhance the interests of clients, employees and shareholders."

The company statement confirmed that no offer had yet been made for GlobeOp.

GlobeOp shares were traded at a price of 400 at one point this afternoon but analysts underplayed the rise due to the tiny volumes exchanged.

One analyst told HFMWeek the trades were “negligible” in size but agreed with the company’s board that GlobeOp’s share price has undervalued them in recent months.