Disgruntled investors got their way. The Dutch trust company Intertrust has a takeover offer accepted from its American counterpart CSC and has agreed on the further conditions. It has been agreed that the head office will remain in Amsterdam for at least another two years.
Trust offices such as Intertrust provide all kinds of administrative and managerial services to companies. For example, they can manage ‘letterbox companies’ for foreign companies for a fee.
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Shareholders have been complaining for some time about a low stock market valuation of Intertrust, a company with almost 4,100 employees that had a turnover of more than 560 million euros last year.
Just a month ago, activist shareholder Hawk Ridge Capital published an open letter. It stated that Intertrust had not been meeting its own expectations for years and that the company was growing slower than the market. There was also a suggestion: sell the company to a colleague in the industry.
Stricter rules
The merger is also a result of the increasingly strict rules for trust offices worldwide. Supervisors keep a close eye on whether they check their customers enough for money laundering and tax evasion. The more time-consuming these checks become, the more they will put pressure on the profit margins of trust offices.
The stricter rules were partly the result of international tax avoidance scandals, the most famous of which was the Panama Papers (2015). Opposite The Financial Times Intertrust’s financial director, Rogier van Wijk, called these rules “one of the main reasons for a consolidation battle” in the trust sector on Monday.
CSC is willing to pay 20 euros per share, almost 60 percent more than the market value on November 11, when the first potential buyer came forward. With this offer, Intertrust is valued at EUR 1.8 billion. CSC says it has already secured the financing. Intertrust shareholders and regulators have yet to agree to the plans.
The financial services provider CSC is mainly large in its home country the United States. It provides legal and tax advice to companies in North America, Europe and Asia, among other things.
Global player through acquisitions
CSC says it does business with 90 percent of the companies in the Fortune 500, the ranking of US companies with the highest revenue. The company has 46 offices in fourteen countries, including the Netherlands, in Maarsbergen.
Current CEO Rodman Ward is a great-grandson of Christopher Ward, who founded a predecessor of CSC in 1899. The company is still owned by descendants of the founders.
Until the 1970s, CSC remained a small regional consultancy in the state of Delaware, on the US East Coast. But in recent decades, through mergers and acquisitions, CSC has grown into a global player in the trust sector, with around three thousand employees. The company does not disclose revenue details.
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Last month, Intertrust still seemed to fall into the hands of the American investment company CVC Capital Partners, for 18 euros per share. But the parties’ exclusive takeover talks ended last week.
In addition, there was an offer of 22 euros, according to the FD from Apex, a Bermuda trust office. But this bidder was unable to specify how it would finance the acquisition, according to Intertrust.
CSC and Intertrust hope to close their deal in the second half of next year.
A version of this article also appeared in NRC in the morning of December 7, 2021
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