Getty/M&A: Trillium must shed more light on snap bid

The return of Getty Images to the public market has been far from picture perfect. The company, one of the world’s largest and best-known photo agencies, has suffered a share slump. From a high of nearly $31 shortly after it went public via a blank cheque merger last summer, it fell to a low of around $3.50 last month.

Now a little-known investor has offered to buy Getty at $10 a share. That would be a nice, chunky premium for a business whose famous name is accompanied by losses and $1.4bn in debt. Not surprisingly, the stock surged by more than a third to $6.85 on Monday.

The non-binding cash offer would value Getty’s equity at $4bn. Investors should contain their enthusiasm. The bidder, Trillium Capital LLC, appears to be a small outfit based in Massachusetts. It should not be confused with Trillium Asset Management, a fund manager with $6bn in assets under management, or other businesses with similar names.

Trillium Capital LLC says it owns 500,000 shares and share equivalents in Getty. That would be a modest 1.3 per cent stake. The bidder does not appear to have a record of buying or running companies of Getty’s size. Trillium boss Scott Murray told Lex he has his own capital pool and “deep relationships” with investment banks and buyout groups to fund his bid. He is not working with an adviser and declined to say what assets Trillium manages. An amateur photographer, Mr Murray added that he sees “over $1bn of untapped value” in Getty’s photo archive.

Trillium Capital LLC may yet reveal significant financing. In the meantime, investors and other bidders should give depressed Getty shares a second look.

Selling photos is a tough business. Competition from low-cost rivals such as Shutterstock has chipped away at Getty’s dominance. The main clients of Getty — ad agencies and newspapers — have struggled as new media disrupts old business models.

The rise of AI could create a new revenue stream, however. Shares in Shutterstock have gained 45 per cent since last October, when it revealed it has struck a deal to license its image library to OpenAI.

Getty’s debt pile, equal to 4.7 times adjusted ebitda, is a pressing issue. But its archive of more than 135mn images may be worth more than the market currently calculates.