Exclusive: Capita Founder Plots Megadeal

Sir Rod Aldridge, founder of the outsourcing group Capita, has been courting City investors to raise hundreds of millions of pounds for a major takeover deal.

I have learned that Sir Rod, a Labour lender who quit as Capita's boss in 2006, has been working with bankers at JP Morgan Cazenove and Numis Securities on a plan that would see him return to the helm of a publicly-listed company.

People close to Sir Rod tell me that the fundraising efforts have been hampered by the state of the stock market and broader investor disquiet towards so-called 'special purpose acquisition vehicles', or SPACs, several of which have underperformed since listing in London.

According to my sources, Sir Rod is keen to pursue a big takeover deal in the support services or business process outsourcing sectors. The acquisiton would be reversed into the new vehicle, in which one of the Capita founder's sons is also understood to be involved.

Institutional investors have been approached in recent weeks about backing a fundraising aimed at generating up to £400m of new capital, although a lukewarm response means it is unlikely to be revived until the autumn at the earliest, insiders say.

The structure of Sir Rod's vehicle could also change materially following investor feedback.

"He [Sir Rod] has a good track record, but investors are very concerned about backing another blind pool of capital," one investor said.

SPACs have been a popular way for prominent entrepreneurs to raise capital in recent years.

Nat Rothschild, the billionaire financier, has used two such cash shells to fund a takeover spree in the natural resources sector, although external investors have failed so far to profit from them to the same degree as Mr Rothschild and his colleagues.

Hugh Osmond, another leading entrepreneur, used a SPAC last year to finance a reverse takeover of APR Energy, a provider of temporary power systems. That, too, has struggled since the takeover was completed.

Recently, Tungsten Corporation, another new vehicle, aborted plans for a stock market listing because of market conditions.

A spokesman for Sir Rod declined to comment.