M&Atriggers upgrade for this ASX share
Meanwhile,the Regis Healthcare Ltd (ASX: REG) share price got upgraded by Morgans to “add” from “hold”.
Thisis largely due to the merger and acquisition (M&A) fever that’s washingover the ASX. We’ve seen high-profile takeover attempts for the Crown Resorts Ltd (ASX: CWN) share price and Tabcorp Holdings Limited (ASX: TAH) share price. Enthusiasmfor acquisitions have also spilt over into the aged care space. Regis receiveda non-binding offer that it rejected and rival Japara Healthcare Ltd (ASX: JHC) is also being pursued.
Price discovery uncovers value
“Although the Japara take-over offer is still non-binding and a few months away from a clear decision point, it does suggest the two other listed players are trading at multiples that could provide upside for investors.”
The Japara share price is trading on an adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) multiple of around 9.4 times.
In contrast, the Regis share price is trading on an adjusted EBITDA of 8.8 times, according to Morgans.
The broker’s 12-month price target on the Regis share price is $2.23 a share.
