Blue Prism surge continues amid private equity interest

US private equity firms eye UK firm, but one investor voices opposition to any takeover

A business meeting in progress                                 
Blue Prism is the latest UK target for US private equity firms – Photo: Shutterstock

Blue Prism saw its stock price continue to rise on Thursday, having become the latest British target for US private equity (PE) firms. 

Automation firm confirms talks

The robotic process automation company jumped by more than a third between Tuesday and Wednesday, after it confirmed it had begun discussions with Vista Equity Partners and TPG Capital. 

In an update to the stock exchange, the AIM-listed firm maintained: “There can be no certainty that any offer will be made, nor as to the terms of which any offer would be made.” 

Based in Warrington, the company provides software that automates back-office clerical tasks for businesses. 

It is the latest in a slew of British companies to have been targeted by American PE firms. Indeed, takeovers of British companies reached a 14-year high in the first seven months of 2021, with the likes of John Laing and Morrisons among the notable names recently approached. 

Activist investor voices opposition

According to CNBC, however, any takeover could be stymied by another New York-based PE firm that already has a stake in Blue Prism.

Coast Capital, the activist investor that had previously moved to stop FirstGroup’s sale of its US operations, stated in a letter to Blue Prism’s management: “Were a buyer to pay a premium of 100%, the share price would still be materially lower than its intrinsic value, and well below where the shares were trading as recently as January 2021.” 

It added: “Even at its current worst, the company enjoys an enviable reputation as a best-in-class performer, and as a result remains a leader in its rapidly growing and very profitable industry. Now is not the time to throw in the towel!” 

Before this week’s jump, Blue Prism traded almost 70% below the all-time high it had reached in late 2018. By mid-afternoon, the company stood 5.8% higher at £12.11. 

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