Capita In Raid For Xchanging Shares
The outsourcing group Capita (LSE: CPI.L - news) has swooped to buy a big stake in rival Xchanging (LSE: XCH.L - news) as it closes in on a takeover deal worth more than £400m.
Sky News has learnt that Citi, Capita's broker, acquired roughly 24m shares in Xchanging on Wednesday on behalf of its client - equivalent to a shareholding of nearly 10%.
The share purchase, which is designed to deter other bidders from making a move on the former University Boat Race sponsor, is likely to be disclosed publicly under stock market rules by the end of the week.
Citi is said to have paid around 160p-a-share level for the stake, the level at which Xchanging said last month it was willing to recommend a takeover by Capita.
Capita's raid came the day after Apollo Global Management, which had been considering a bid worth 170p-a-share, said it was no longer interested in making an offer.
Xchanging specialises in managing back office and associated services for insurers and other companies, but has seen its shares struggle amid competitive pressures.
Its biggest clients include Lloyd's of London, the insurance market, and blamed disappointing first-half results on the poor performance of its procurement business.
The company's chief executive has announced plans to leave.
His successor, former HP Enterprise Services executive Craig Wilson, is not due to take over for some time.
Capita and Xchanging declined to comment.