Been reading booklet which I just received and opened today....not many outs for bidder...could be delay or perhaps worse from approval by authorities...or page 34 states I believe if they have been given a warranty by a director of KKT that is misleading and is of an order of magnitude to be significant, they could walk. I read from back towards the front and didn’t read all and did not look at front 33 pages...but I was reading in particular the “ get out clauses”
I also looked at valuation methodologies....Lonergan Edwards I have marked down in my brain as being a bit ordinary...but perhaps only a few times and it grated with me! But I believe they have set out to get a value lower than the offer, and significantly so....discount rate of 11.5 % in this interest rate environment, including an assumption we want 6 % above an already inflated risk free rate of 3% ...also very very modest assumptions about growth in business . Their ebitda takeover comparisons are floored because they use a takeover by konekt itself, and also quite a few by zenitas healthcare when they were rolling up, and a sector which is even more volatile and was very premature ...often the sellers got equity in the acquirer which also makes a difference.....there is also some very cheap takeovers thrown in which I am not familiar with.
Either way, it’s still a hold, even if this takeover blows up.
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