- Apax Partners made a £203m takeover approach last October for Kin & Carta
- Digital services provider Valtech came out in December with a £239m deal
Apax Partners is out of the race to buy Kin & Carta after a rival put forward a higher bid for the digital technology consultancy.
The private equity group made a £203million takeover approach last October for Kin & Carta, which advises firms on technology strategies, claiming it was ‘better placed’ to help further the company’s growth.
It subsequently increased the offer to £220.3million in December, meaning investors would receive 120p per share compared to the previous proposal of 110p.
Acquisition bid: Private equity group Apax Partners made a £203million takeover approach last October for Kin & Carta, which advises firms on technology strategies
Later that month, Valtech, a digital services provider whose largest shareholder is investment firm BC Partners, came out with a 130p-per-share deal valuing the business at £239million.
Apax had until the end of trading on 8 March to lodge a higher bid, but the company refused to budge, meaning its offer has now lapsed.
Founded in 1964 by future Labour peer Robert Gavron, Kin & Carta was initially a printing business called St Ives, named after the town where it was located.
Over the following decades, it expanded to become Britain’s biggest printing firm, producing annual company reports and popular magazines like The Economist, Vogue, and Time Out.
By the time Gavron stepped away from day-to-day management, St Ives had a market value exceeding £400million.
But during the 2000s, the group began struggling as the publishing world shifted online and print journalism suffered a significant slump in revenues.
After recording its first-ever annual loss in 2009, the firm began transitioning to a more digital-focused operation when it acquired marketing and data business Occam.
St Ives exited the printing sector following the sale of its print management division to Paragon Group in 2018, the same year it was renamed Kin & Carta.
In its most recent annual results, the company blamed ‘macroeconomic challenges’ leading to longer sales cycles and more cautious spending among clients for its revenue flatlining at £195.9million.
The firm’s adjusted operating profits also declined by approximately 18 per cent to £18.5million amid more difficult trading conditions across the Americas.
Kin & Carta shares were 0.3 per cent lower at 128.2p just after midday on Monday, although they have surged by around a quarter over the past 12 months.
- The estate agency revealed that profit before tax fell by 34% to £7.9m
- It also added that lettings revenue jumped 16% to £101.2m
Foxtons revenues generated by house sales slumped last year, but the estate agent’s performance was buffered by a jump in rental income.
The London-listed group’s sales revenue fell 14 per cent to £37.2million in 2023 while the number of houses sold sank by 11 per cent year-on-year, reflecting higher mortgage rates and weaker mortgage availability.
But Foxton’s annual revenue rose 5 per cent to £147.1million, as lettings revenue – which accounted for about 70 per cent of turnover – jumped 16 per cent to £101.2million despite a 6 per cent fall in the number of properties letted.
The London-listed estate agency reported saw a 34 per cent drop in profits before tax to £7.9million
It reported a 34 per cent drop in profits before tax to £7.9million, largely as a result of one-off costs including closing some of its branches.
Commenting on the fall in house sales, Foxtons said transaction volumes ‘were at some of the lowest levels since 2008 and 2020, years impacted by the global financial crisis and the Covid-19 market shutdown respectively.’
However, Foxtons noted that mortgage rates had begun to dip below 4 per cent towards the end of the year, from levels of around 6 per cent 12 months earlier, helping to lift demand.
Guy Gittins, chief executive officer, of Foxtons said: ”Our strategy to deliver growth through sales market cycles by delivering lettings growth is working, delivering resilient earnings for the year despite a weak sales market and the investment we made in fee earners.
‘We are on track against our medium-term target of delivering £25million to £30million of adjusted operating profit, through organic and acquisitive growth and supported by improving market conditions.’
In recent times, Foxtons has largely benefitted from its letting business. The UK capital is home to the country’s highest rental prices, which have seen enormous increases since 2021.
This is in part because landlords who have seen their mortgage payments spike have passed on the extra cost to their tenants.
Higher rents equal more commission for lettings agents – and the firm also earns interest on tenant deposits which it holds.
Office for National Statistics data shows that average rental prices in London were up by 6.9 per cent in the 12 months ending November 2023.
In addition to a healthy 28 per cent year-on-year jump in its sales business, Foxton’s scored a 36 per cent increase in lettings sector market share last year
Foxtons shares were down 3.02 per cent to 57.90p in early afternoon trading on Tuesday.
Sophie Lund-Yates, lead equity analyst, Hargreaves Lansdown said: ‘Estate agents will always feel the pain at times of economic stress, but Foxton’s market share means it’s in a better position than some in the short-term.’
DIY INVESTING PLATFORMS
AJ Bell
AJ Bell
Easy investing and ready-made portfolios
Hargreaves Lansdown
Hargreaves Lansdown
Free fund dealing and investment ideas
interactive investor
interactive investor
Flat-fee investing from £4.99 per month
eToro
eToro
Share investing: 30+ million community
Bestinvest
Bestinvest
Free financial coaching
Affiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence.
Jacob Rothschild’s death yesterday at 87 could result in a Succession-style battle between his heirs for his sprawling property and investment empire.
A colossal figure in the City, he bestrode the Square Mile for several decades.
Starting at the family banking group NM Rothschild in 1963, he left 17 years later after falling out with his cousin Sir Evelyn de Rothschild over a merger with rival SG Warburg.
At the time, it was the talk of the town. One financial journalist described it as the ‘the most notorious bank-family split in City of London history’.
Striking out on his own, he took charge of RIT Capital Partners, which is worth £2.6billion and a stalwart of the FTSE 250.
Legacy: Jacob Rothschild (pictured), who died yesterday at the age of 87, was a colossal figure in the City who bestrode the Square Mile for several decades
His deal-making skills and easy charm saw the business grow fast, while his market commentaries were highly anticipated, such as when in 2019 he described the post-Brexit deadlock as the UK’s biggest political challenge since the 1956 Suez crisis.
While doing all this, he also co-founded wealth manager St James’s Place in 1991, money manager GAM in 1983 and made an unsuccessful bid for British American Tobacco in 1989, which, had it come off, would have been one of the biggest take-overs of all time.
A source close to the family said: ‘He was viewed as an establishment figure. Business-wise he was far from it. He took plenty of risks.’
To this day, RIT Capital remains one of the most popular trusts in London with offices based in Spencer House overlooking Green Park.
Its investments are varied and include WeBull, the New York investment platform, and Motive, the logistics group.
In the UK, the firm backs technology investor Firstminute Capital. The annual return of 10.7 per cent remains impressive to this day and RIT has turned a £10,000 investment in 1988 to £345,000 in 2024.
But the big question is who will step into Rothchild’s shoes and what happens to his 13pc stake in the business.
To the Rothschilds, leadership succession is treated like that of an accession to the throne in a monarchy – not unlike the fictional Roy family in the popular TV series Succession.
It is an obsession that has enabled them to keep their name alive while other traditional City families – such as Kleinworts and Warburgs – have disappeared.
For many years, Nat, 52, appeared to be the natural successor, ‘a chip off the old block’ who moved effortlessly in the world of high finance. But his father disliked his playboy lifestyle and rebellious streak.
Born in 1971, he is the youngest child and as the only son is heir apparent. But he does not have a direct stake in RIT Capital, but instead holds an indirect holding through the family’s private equity firm Five Arrows.
He upset his parents in 1995 when he eloped with socialite Annabelle Neilson, but the marriage lasted just three years.
Relations with his family became strained and, in 2016, Nat refused to invite his father to his second wedding to former glamour model Loretta Basey.
He has since rebuilt his name with Volex, a cable manufacturer to Tesla.
But it is his sister Hannah, 61, an author, and Jacob’s eldest daughter, who has emerged as the frontrunner.
Known for her savvy and calm head, she has a 10 per cent stake in RIT and sits on the board as a non-executive director.
A divorced mother of three, she is also chairman of Yad Hanadiv, the Rothschild charitable foundation in Israel.
Whether Hannah or Nat win out, both will have big shoes to fill.
RIT Capital Management said in a statement: ‘RIT is proud that its association with Lord Rothschild’s family interests continues via his daughter, Hannah Rothschild, who has served as a Director of RIT for over a decade.
‘The majority of the beneficial and non-beneficial interests relating to the Rothschild family are in respect of shares held via trusts, companies or charitable foundations where Hannah is a beneficiary, trustee, or is able to exert significant influence.’
Some links in this article may be affiliate links. If you click on them we may earn a small commission. That helps us fund This Is Money, and keep it free to use. We do not write articles to promote products. We do not allow any commercial relationship to affect our editorial independence.