Euronext Makes Offer for Allfunds; Maintain Fair Value Estimate

Narrow-moat Euronext confirmed media reports that it has made a conditional offer to acquire fund distribution platform Allfunds. The European exchange group offered EUR 8.75 for each outstanding share of Allfunds, valuing its equity at EUR 5.5 billion. The offer comprises a EUR 5.69 cash component with the remainder paid in shares, enticing shareholders with a 19% premium above the Feb. 21 closing price. The transaction is conditional on approval by the largest shareholders (BNP Paribas with a 12.1% stake and private equity consortium LHC3 with 34.3%). We maintain our EUR 88 fair value estimate.