TPG Capital plays hard ball with InvoCare’s board to lower bid

afr.com:

Private equity firm TPG Capital has fired a warning shot at InvoCare, telling the board over the weekend it is ready to walk unless the two camps can agree to a deal at a lower price.

InvoCare is the country’s largest operator of funeral services. Dan Peled

It is understood TPG Capital is dangling due diligence findings that point to lower earnings at InvoCare to build a case for it to lower its bid from $13 a share.

Sources said the bidder was looking at slowing death rates and weaker performance at InvoCare’s competitors to argue for a recut. InvoCare is due to hand down its first-half results on August 28.

InvoCare shares were halted on Monday morning pending an update on the bid.

It would be interesting to see how far InvoCare gets with its push. Investor sources have expected TPG to seek a deal at the $12.65 mark – the same price at which the private equity firm raided the target’s register back in March.

InvoCare has extended the due diligence thrice, the latest iteration of which expired on July 17. It yanked back its $12.65 a share bid on April 24, only to return less than a month later in mid-May with a $13 a share bid. It also owns nearly 19.2 per cent of InvoCare.

TPG is being advised by UBS, Jarden and Gilbert+Tobin, while InvoCare has engaged Goldman Sachs, Gresham Advisory Partners and Clayton Utz.