News in the national newspapers over the weekend indicated that two private equity firms - Astorg Asset Management and Epiris - were considering a cash offer for London-listed Euromoney Institutional Invest (LSE:ERM), a FTSE 250 company. The cash offer of 1461 pence per share values the financial publishing and events group at around GBP 1.6bn, a far cry from its origins as a magazine founded by Sir Patrick Sergeant in 1969.
Needless to say the news provoked a jump in the price of Euromoney stock, from a relatively rangebound 1080p to trade at close to the offer price (1374p at time of writing). Look out though: the PE ratio is already a hefty 164x. Is private equity just paying over the odds for this one, and how can you turn around a company already valued at such a level?
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