Capita on track to win race for Xchanging as Apollo bows out

"Apollo Investment Fund VIII, L.P. has notified Xchanging that it is no longer interested in potentially making an offer."

On 14 October, outsourcing group Capita said the board of Xchanging had recommended its 160p per share offer, which values the company at around £412m, in the absence of a higher offer.

The deal, which is expected to be immediately earnings-accretive for Capita, represents a premium of 44% to Xchanging’s closing price of 111p on 2 October, which was the last business day prior to the commencement of the offer period.

Capita said the acquisition was consistent with its stated strategy of acquiring businesses that build capability in existing operations, allow the company to enter new attractive industry segments and enhance its future organic growth potential.

In addition, it would enable Capita to secure at least £35m in cost synergy benefits driven by head office, shared services and IT efficiencies in full-year 2017, at a cost of around £20m in the first 12 months after acquisition.

At 1026 GMT, Xchanging shares were down 6% at 158p, while Capita was up 0.3% at 1,286p.