I think that has cropped up before but the reality is that there is not much difference in PE but Regus uses far more debt to fund the company. 74% Debt to Market cap. Not using the added but basic debt as a percentage of what the market value of the equity is.
So at a 19PE its not that much higher than RGU , however the say 1.7 Aud to UKP means that if they pay around $7.00 to $7.50 they would not impact their price if they issued shares to cover the acquisition but immediately they would get 60 million pounds cash and have added another rounded UK Pounds 425 million to equity and reduced their gearing from 74% to around 60% o the debt to market cap. The synergies must be huge...
I however don't think its anything other than people getting more comfortable that the second half may have been in line with managements expectations... That added to the significant shareholders ( Mostly banks) selling down seems to have also slowed...
I just think its cheap if USA starts to fire and Europe improves...
Seeing that WeWork needed more money recently and the funding valuation seems to value it at $20 billion maybe they are going to buy something like SRV to start getting profits growing... Seems a very small price to pay if they are immediately in the money flow. Regus may not interest them as it adds a huge pile of debt...
I am just hopeful that we see a good set of results or at least green shoots in USA.
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