M&G Investments, the £367bn asset manager, has blasted plans to sell London-listed UDG Healthcare to buyout firm Clayton, Dubilier & Rice, the latest in a series of criticisms of private equity deals by big fund managers.
Shareholders are due to vote in June on the £2.8bn all-cash offer to sell UDG, which provides clinical, commercial, communication and packaging services for the healthcare industry. But London-based M&G, which is a top-five shareholder in UDG according to data provider CapitalIQ, said the bid “fails to offer fair value to ordinary shareholders, including the customers on whose behalf we invest”.
Rory Alexander, a fund manager at M&G, said he was concerned that CD&R would benefit from the UDG deal at the expense of ordinary investors.
“The $3.7bn offer does not reflect the potential long term value creation of UDG’s organic growth story, opportunity for strategic acquisitions, consistent cash generation and fortress balance sheet,” he said.
“The material mismatch between the offer price and our opinion of UDG’s true value represents upside transferred away from ordinary shareholders towards the private equity bidder.”
