Capgemini Buyout Scheme Meeting, page-4

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Cheapy

425 Posts.

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14/10/21

16:36

Post #: 56804817
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Originally posted by Cheapy: ↑

Who knows how the market will react if the deal doesn't come off, it really depends on the circumstance. If shareholders vote against the deal it sends a pretty strong signal to the market of the value of Empired.

The tail winds of the digitisation industry are blowing very strongly post covid, low interest rates, and with Empired cycling into a period of strong performance one would expect that an acquirer would need to pay substantial good will for a successful buyout to occur. Now at the take over price Empired is at half the price earnings ratio of the Australian IT industry as a whole. I don't see that substantial premium being offered yet.

So if the deal goes through I get a bunch of cash which I have to pay tax on and then reinvest in an expensive market.

Or the deal doesn't go through and the market continues on its path of recognising the value of Empired, I don't have to pay tax, I don't have to reinvest in an expensive market and I can determine when and how much of Empired I want to sell.

I know which of these two scenarios I'd prefer.

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I wonder what Samson Rock Capitals angle is? They became a substantial holder on the 28th of September 2021 which was after the SP had reacted to the news of the Capgemini deal. What is in it for them? 2 or 3% if the deal goes through?? Surely they could get that same deal at lower risk. I think they might be a no vote.

EPD Price at posting: $1.34 Sentiment: None Disclosure: Held
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