The deadline for a rival offer falls Friday, and the private equity firm that spent weeks preparing one has ended its alliance and said there is no certainty it will bid at all.
The takeover contest for Gamma Communications has a deadline, and it arrives Friday, .
That is the date by which Waterland Private Equity must either announce a firm offer for the UK communications group or step back. It has spent weeks positioning to make one. On it ended the joint pursuit it had been running with Giacom and said it is continuing to consider its interest in Gamma, but that there can be no certainty of a firm offer.
That is the language of a bidder losing conviction rather than one preparing to move.
What it would have to beat
Epiris already has a board-recommended agreed cash offer on the table at 1,120 pence a share, valuing Gamma's equity at roughly £1 billion and representing a 53% premium to the undisturbed share price. It was announced , ahead of Epiris's own deadline.
Waterland has never disclosed a price at any point in this process. Reports through early September indicated it was preparing to bid above Epiris's terms, but no figure was attached to that at any stage, which is a notable absence this far into a contested situation.
What the shares say
Gamma fell roughly 2.8% on the day Waterland ended the alliance, to 1,141 pence. That is 21 pence above Epiris's recommended offer.
The market is therefore holding a small premium to the agreed price. That is a modest but real residual probability of a competing bid, or of an improved one, priced into the shares after the news that weakened the competing bid. It is not the pricing of a market that has written Waterland off.
The mechanics that keep it open
A target board recommending one bidder's offer does not, under UK takeover rules, end a separate possible bidder's ability to compete up to its own deadline. Waterland's right to bid survives Epiris's recommendation. What has changed is the partner, the public confidence, and the amount of time.
Four days from now the question resolves one way or the other. Either a firm offer appears with a price on it for the first time, or Epiris's 1,120 pence becomes the only offer in the contest.