Liberum lifted e-commerce group THG to ‘buy’ from ‘hold’ on Monday, hiking the price target to 220p from 55p as it moved to a sum of the parts valuation, with the company now "in play" after confirming it had received a highly preliminary and non-binding indicative takeover proposal from private equity firm Apollo Global Management.
THG
17 April 2023 15:55:37
Source: Sharecast
The broker said the approach by Apollo brings into light the sum of the parts valuation.
"While there is no certainty a deal will transpire, we highlight in this note just cheap the shares are," it said.
"There is no doubt the shares have been hit hard due to numerous factors and the current market, despite today’s circa 40%, is still significantly below what our SOTP suggest."
Liberum said that if there was no potential deal, then the focus should be on free cash flow, where there are now several positive signals. It said that results on Tuesday could be a further catalyst, bringing with them hope of heightened disclosure.
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