Equals finally strikes £283m takeover deal with Lord Hammond-led group

Equals Group is set to merge with the payments firm chaired by Lord Hammond after striking a £283m takeover deal today, potentially drawing a line under a protracted period of talks that has dragged on for more than a year.

The Aim-listed payments outfit, which first addressed a potential takeover by a separate group of buyers last November, said it had agreed on a 140p per cash offer from a group of bidders, including Railsr, chaired by the former Chancellor.

Alongside Railsr in the buying group are private equity outfits Towerbrook and JC Flowers. The deal marks a premium of 37 per cent on Equals’s share price on 31 October 2023, the day before suggestions of a takeover were made public.

“We are creating a significant new player. At a time when there is much fragmentation in the market, we will be well placed to provide an enhanced service to our customers,” Hammond said in a statement.

“Equals is a well-run company with strong brands. The board of Railsr is  confident that this combination will deliver real value for the shareholders of the Combined Group.” 

The agreement of the deal is set to end a mammoth takeover period involving 14 extensions to the initial ‘put up or shut up’ deadline imposed by the regulator. 

Bosses at Equals said the offer was “fair and reasonable” and they would now recommend it to the company’s shareholders.

“In recommending this transaction, the board believes that it has secured a future for the Equals  Group in a private environment while delivering greater value to shareholders than was ascribed to  the Equals Group as a standalone business executing an independent strategy,” said Alan Hughes, non-executive chairman of the firm.

Founded in 2007 as a consumer payments business, Equals has shifted its focus to the business-to-business market and operates payment and card products across five brands.

If the deal is agreed to by Equals shareholders, the combined firms will “potentially create one of the largest and most capable embedded finance platforms in Europe”, the buyers said in a statement.

Some 14 per cent of Equals shareholders have already suggested they will back the deal, according to a joint statement.

Shares in the company spiked around 11 per cent after the announcement of the deal, meaning they are now more than 27 per cent more valuable since the firm announced its strategic review last November.