ÀÏ˾»úÎçÒ¹¸£Àû

On 5 August 2020, Finnish insurer Sampo plc, and South African Rand Merchant Investment Holdings Limited (RMI) announced that they have agreed on the terms of a recommended cash offer for FTSE 250 company Hastings Group Holdings plc.

The offer values the company at £1.66 bn – a 37.5 % premium to the volume-weighted average price of 182 pence per Hastings share for the three-month period ended 28 July 2020. The offer also represents the highest deal value for public M&A activity in 2020 so far, the one transaction already pushing the aggregate deal value for August higher than all 5 firm offers announced in July 2020 combined, despite the fact that July also saw an offer in excess of £1 billion. On 31 July, Cypriot company Fortiana Holdings made an for one of Russia’s leading gold miners, Highland Gold Mining, valuing the company at 1.09 billion dollars.  This comes after Fortiana, a company majority owned by Russian businessman Vladislav Sviblov,  purchased a 40% stake in Highland Gold at a price of £3 per share, triggering a mandatory offer under Rule 9 of , which requires Fortiana to extend this offer to the remaining shareholders of Highland Gold.

The offer comes at a time where gold prices are nearing record highs, as investors flock towards safe havens amidst the increasing uncertainty caused by the pandemic. Fortiana has stated the following regarding the recommended acquisition:

‘The Offer provides Fortiana with an opportunity to participate in the realisation of Highland Gold's upside potential through production, organic growth and Fortiana's positive outlook on future gold price performance.’

In line with Fortiana’s prediction, gold prices have continued to inflate since the announcement, with gold topping £1,527 ($2000) an ounce for the first time on 4 August, as coronavirus cases continue to rise, particularly in the US. The push in gold price has further escalated due to rising tensions between China and the US.

Uncertainty caused by the pandemic also saw deal value depressed to its lowest levels since 2009, with a half-yearly aggregate deal value of £2.6 billion in H1 2020, compared to aggregate deal values of £26.5 billion and £27.5 billion in H1 2019 and H2 2019 respectively. H1 2020 also saw only one deal announced with a deal value over £1 billion (being Freshwater Group’s for Daejan Holdings). However, investor confidence does slowly appear to be increasing again, with an uptick in deal activity since H1. This is also reflected in deal value, with 2 deals over £1 billion already this quarter, marking the aggregate deal value since H1 2020 at £3.28 bn – already a 26% increase on aggregate deal volume in H1.

Our H1 Trend report anticipates that we will continue to see an increase in deal activity and value throughout H2. For more on the impact of coronavirus and other trends on M&A activity see our 2020 H1 Public M&A Trend report.  Market Tracker will continue to monitor these trends as they develop.