TPG’s funeral deal is stuck in awkward purgatory

InvoCare

24/04/2023 07:11

(The author is a Reuters Breakingviews columnist.  The opinions
expressed are their own.)
       MUMBAI, April 24 (Reuters Breakingviews) - TPG  TPG.O 
is stuck between the mortal world and the afterlife with its
dalliance with Australia’s funeral-services company InvoCare
 IVC.AX . On Monday the firm run by Jon Winkelreid withdrew its
buyout offer that valued the enterprise at A$2.2 billion ($1.5
billion) after the target unanimously rebuffed the unsolicited
non-binding proposal. But the roughly 20% stake it picked up
around the same time locks the pair into an awkward dance. 
    It's a messy situation. The company’s stock plunged as much
as 15% before paring back some losses, moving below the A$12.65
per share TPG paid for its stake and the same price it was
offering for the whole. InvoCare was open to better terms, and
offered the suitor access to limited, non-public financial
information. TPG declined and now wants a seat on the board
instead. 
    Following the collapse of Silicon Valley Bank in the United
States, rising global worries about financial stability will
make it harder to do deals. TPG’s offer, at a 41% premium, was
tricky to start with: Breakingviews calculations showed that to
generate a 20% internal rate of return after five years would
have required TPG to more than double this year’s expected
EBITDA to A$320 million. A rethink makes sense. (By Una Galani)

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 (Editing by Robyn Mak and Thomas Shum)
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