DWF (DWF) is weighing up a possible takeover deal, in a move that could take the UK’s biggest listed law firm off the public market. Inflexion Private Equity Partners is proposing to buy all of DWF for 100p per share, valuing it at £342mn. This would consist of cash consideration of 97p per share and a 3p dividend.
DWF said that “should a firm offer be made by Inflexion on the financial terms of the proposal, it would be minded to unanimously recommend it to DWF shareholders”. Inflexion has until 7 August to announce a firm intention to make an offer.
The possible cash offer caused DWF shares to jump by a third, and represents a 50 per cent premium to Friday’s closing price, and a 100 per cent premium to June’s record lows. Inflexion also put forward an alternative loan note and preference share option, where shareholders would maintain some exposure to the company.
Analysts at Peel Hunt described the deal as “opportunistically cheap” but said that investors and staff would probably welcome the proposal.
“Investors have put DWF into the ‘too-difficult’ box for a long time, refusing to rate it in line with its leadership position, size and margin opportunity,” the broker concluded.
DWF has faced a number of challenges since its IPO in 2019, when it became the first legal business to list on the London Stock Exchange main market. Poor cash conversion, the ousting of long-standing chief executive Andrew Leaitherland in 2020, and expensive streamlining efforts have all worried investors.
