- Hargreaves Lansdown
- 19 June 2024 10:03:58
Source: Sharecast
"In light of the confirmation from HL/ of a further possible offer from the consortium before tomorrow's 5pm deadline, we move our PT to the £11.40 offer level and our recommendation to hold, but would draw attention to our upside scenario," the bank said.
Jefferies said 17x price-to-earnings is a "very good" deal for sector-leading scale, market share, operating margin and brand recognition.
"We doubt the consortium is the only party looking and set an upside PT of £12.50, or circa 18x earnings," it added.
The bank expects the consortium to confirm their offer, which includes a 30p final dividend, by Wednesday.
"The Takeover Panel will likely grant the time extension, and the board will recommend the offer to shareholders," it said.
The new offer includes an option for the company’s shareholders to elect for a rollover equity alternative in respect of some or all of their shares.
"The largest private shareholders will probably roll over quite a lot of their holdings into the acquisition vehicle; most institutional investors will not be able to, but we think the 35% upper limit of shares to be rolled will probably be reached."
Jefferies also said there could be more offers. It noted that offer price is cheap and said it doubts the board would have indicated its intention to recommend it were it not for the rollover clause.