Blue Prism brings in Quattrone as brokers prepare for a bidding war
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Blue Prism: on reflection
It’s never easy to make a splash as a sellside analyst with a new employer. One way is to correctly predict a billion-pound takeover approach with your first note.
Harvey Robinson joined Panmure Gordon in July. His debut research published in the same month was titled, “Will Blue Prism be bid for? And by whom?” A follow-up at the start of August fleshed out the argument, the gist of which was that an under-appreciated market share made the Aim-quoted software maker easy prey for numerous potential acquirers.
Direct hit: Blue Prism said this week it had been approached by US private equity groups TPG Capital and Vista Equity Partners. By Thursday the Aim-quoted stock jumped 45 per cent to hit a market value of £1.2bn.
Robinson is well known to veterans of the dotcom bubble, having led the technology hardware team at ABN Amro between 1998 and its takeover by Royal Bank of Scotland in 2007. Jobs at Collins Stewart and research group QMG Insight followed, as well as a brief stint investing client money at his now defunct equity hedge fund Ki Capital Management.
Though new to Panmure, Robinson’s professional interest in Blue Prism began in 2017 while at Whitman Howard, which was second after house broker Investec to start coverage. His most recent list of potential predators for the business includes Thoma Bravo and Summit Partners, which specialise in tech buyouts, as well as highly rated direct rivals UiPath and Automation Anywhere. Sector bellwethers Microsoft, SAP, Appian, IBM and Salesforce also receive a mention.
So should investors expect a bid battle? Potentially.
Blue Prism also revealed this week that it had brought in Frank Quattrone’s Qatalyst Partners as financial adviser. The Silicon Valley boutique has a longstanding reputation for shopping tech companies to the highest bidder, most memorably for UK investors when it advised Autonomy on its ill-fated 2011 sale to HP for $11bn.
Deliveroo: bag holders
After a shaky start, Deliveroo has been steadily rebuilding investor confidence. An upgrade of revenue guidance, a probable retreat from Spain and stake building by German peer Delivery Hero all combined last month to briefly lift the food delivery group’s share price back above its 390p flotation price.
Maintaining the confidence of its freelance bicycle army is proving just as big a challenge, however. Over the past few weeks Deliveroo has been touring British cities to hand out free kit to riders. Up for grabs are delivery essentials such as jackets, courier bags and phone mounts, as is branded merchandise including T-shirts and caps.
The act of generosity has caused some ill feeling in the community, which since the start of the pandemic has been suffering the effects of some corporate growing pains.
Deliveroo pledges to replace core kit for free, so long as it’s older than six months and the rider has completed at least 500 orders. But for most of 2021 Deliveroo has been telling riders that because of high demand it won’t be processing their orders until further notice. The form to request replacements has been offline for months.
Riders in need of new kit have instead to rely on a corporate Shopify webstore where a “Pro Series Bicycle Bundle” including bag and jacket is available for purchase at £59.99. Even these supplies are limited, raising suspicions that Deliveroo is using all its available resources to recruit new riders, who receive their starter pack for free.
And with scarcity come opportunities for arbitrage: a small Deliveroo-brand insulated carry bag, theoretically available direct for £9.99, typically sells on eBay for between £20 and £30.