Ray outdoor I agree is a good purchase because it fit in with their existing model so they can save on cost and buying power...and they get Ray outdoor cheap on my calculation or fair value not so with Rebel...they over paid for Rebel by a huge margin...
Buying rebel from private equity you know every single cent has been stripped out of their operation, there is no more saving to be made.. and even then they only make 77m EBITDA
I wouldnt touch any business that generate 77m EBITDA for $610m it has to be a minimum 77m NPAT ... Net Profit After tax
this 77m EBITDA after you take out the T the I the D and the Ayou lucky to have 40m left over for NPAT ..
that a Return on equity is 6.5% ..what the hell? you get better than that dumping the cash in term deposit without any execution risk and business risk.
I'm close to certain the SUL will pay a price for this purchase in fact I will short the stock :-)
This purchase do nothing to shareholder but reward management with their free options.
SUL Price at posting:
$6.13 Sentiment: Sell Disclosure: Held
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