Enterprise rejects 3i bid

3i suffers another setback as £462m Enterprise buyout deal is rejected.

Buyout firm 3i has suffered its second blow this week after its proposed £462 million (€704 million; $912 million) bid for Enterprise, a UK-listed support services firm, was publicly rejected by the company’s board of independent directors.

The news comes just days after 3i was forced to request a postponement of a crucial shareholder vote on its £978 million bid for Countrywide, the UK estate agency chain, so it would have more time to canvass support from dissident shareholders.

Enterprise, which provides maintenance services to local government, utilities and large corporates, said in a statement that contrary to speculation, it would not be recommending a 575 pence per share all-cash offer from a private equity firm, “on the grounds that it undervalues Enterprise”.

Although the company has refused to identify the firm involved, sources confirmed that 3i is the interested party.

However, it could just be a temporary setback for 3i, with Enterprise confirming that discussions were continuing. “Talks are still very much ongoing,” said one banker. “In fact we were slightly surprised to see Enterprise go public with this.”

Enterprise chairman and chief executive Owen McLaughlan and finance director Neil Kirkby were given permission to explore a buyout bid last November, following an approach from an unnamed private equity firm. An independent committee of non-executive directors established at that time has since received “a number of proposals”, according to the statement.

Close Brothers Corporate Finance is advising Enterprise, whose share price was unchanged at 11:32 GMT this morning at 563.50 pence.