Is a Footsie firm set to go private?

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The Independent Online

Private equity experts are predicting that a FT-SE 100 company may be taken private in the near future as the buy-out market reaches new records of activity.

Private equity experts are predicting that a FT-SE 100 company may be taken private in the near future as the buy-out market reaches new records of activity.

Figures released this weekend from the Centre for Management Buy-Out Research (CMBOR), at Nottingham University, show that in the first nine months of this year the value of deals completed or announced was £17.4bn, £500m more than in the whole of last year, which was itself a record.

The figures have been boosted by a resurgence in public-to-private transactions, notably the £3.5bn buy-out of property group MEPC, that was backed by GE Capital.

Barclays Private Equity, that - with Deloitte & Touche - sponsors the CMBOR research, believes that it cannot be long before one of Britain's leading 100 quoted companies falls to the venture capitalists. "It seems the companies are going private to get capital to incentivise the management, which is the reason why they went public in the first pace," said Tom Lamb, managing director of Barclays Private Equity.

Mr Lamb noted that many traditional sectors of the stock market - such as engineering - are being effectively destroyed by private equity deals.

However, Chris Ward, of Deloitte & Touche, noted that the figures were skewed by the MEPC deal and warned that a slow-down could be on the way. "Indicators suggest that the market is overheating; prices are increasing, and deals are becoming scarcer," he said.

The public-to-private market suffered its first casualty last week when Finelist, that went private in April, was placed in administration.

The auto parts distribution company was sold to a consortium of European venture capitalists. However, it was hit by the oil blockade and Ernst & Young was appointed adminstrator on Friday.

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