DJ G8 Education's Exit From Bidding Welcomed by Morningstar -- Market Talk
25/09/2015 09:58AM AEST
2358 [Dow Jones] G8 Education (GEM.AU) was right to walk away from its takeover offer for Affinity Education (AFJ.AU), after its offer was trumped by a deal between its rival and Anchorage Capital, Morningstar argues. Yes, G8 missed out on buying its largest listed childcare competitor. But the investment-research firm notes a deal would have provided a marginal earnings boost at a relatively high price tag. Morningstar has yet to incorporate the one-off windfall G8 will collect selling the stake it built up in Affinity, since the deal remains subject to shareholder approval. So for now it leaves estimates unchanged and maintains a A$4.50/share fair-value estimate, which is well ahead of A$2.99 where the stock last traded. ([email protected]; Twitter: @RobbMStewart)
GEM Price at posting:
$3.07 Sentiment: Buy Disclosure: Held
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