George Lekakis From: Herald Sun December 22, 2009 7:45AM
BROKING analysts have boosted their share price forecasts for IOOF in response to speculation that the wealth manager may be the next takeover target in the local wealth management sector. IOOF, which has a near-watertight share register, has been the subject of intense institutional buying in the recent months led by Canadian fund manager BlackRock.
The share price yesterday defied the negative market, rising 3 to $5.73.
However, in the past week several analysts have raised their target prices for the company's stock to above $7.
Southern Cross Equities analyst Lafitani Sotiriou has raised his target price to $7.35 while Credit Suisse analyst Arjan Van Veen has put a $7 target on the stock and expects it to outperform most other wealth management stocks.
The focus on IOOF has grown since BlackRock revealed last week that it had become a substantial shareholder in the group.
The local wealth market is about to undergo its biggest restructure since NAB and Commonwealth Bank acquired the MLC and Colonial businesses respectively earlier in the decade.
The takeover battle for AXA Asia Pacific's local operations has galvanised investor attention on the sector and IOOF is viewed as a ripe target.
IOOF has more than $22 billion of retail funds under management through its multi-branding strategy which include Perennial, Bridges and Select.
Intersuisse analyst Peter Russell yesterday issued an upbeat report on the company in which he forecast earnings per share to rise by more than 40 per cent in 2010.
He views the stock as an obvious target in future consolidation of the sector.
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