Shares of private school system operator Nord Anglia Education (NORD) jumped as much as 18.5% higher in Tuesday's morning session.
A consortium of private equity firms, led by the Canada Pension Plan Investment Board and Baring Private Equity Asia, is taking Nord Anglia private in a $4.3 billion all-cash deal. The buyout price represents an 18% premium over Nord Anglia's share price as of Monday night, and a 33% increase over the stock's three-month average pricing.
Unanimously approved by the company's board of directors, the deal is still subject to the usual set of closing conditions, including a vote by Nord Anglia shareholders. However, share prices immediately shot right up to the proposed takeout price of $32.50 per share. Investors are acting as if the ink were already drying on the final John Hancock, leaving little room for improvement unless the company can drum up a bidding war.
But that's an unlikely scenario given that Nord Anglia shares have soared 50% higher in less than six months. The stock trades at 62 times trailing earnings and 21 times EBITDA profits, so the bidding consortium is already willing to pay a stiff premium for the company.