British Management Alken Asset Management, which has a 5% stake in Jazztel and its second largest shareholder, said he thinks EXPANSION reject the takeover bid launched by Orange, considering that the price is insufficient.
The company, founded by Nicolas Walewski, guru of European equities, believes that the valuation of 13 euros per share of the Spanish operator is insufficient and does not take into account the synergies that could result from operation. Estimated at EUR 20 target price, which would be willing to sell its stake.
According to calculations by Alken, the synergies of the announced transaction amount to 3,000 million euros, compared to the estimated 1,300 million Orange. Of these, 1.000 million are Orange and 2,000 million, Jazztel. Therefore, says Vincent Rech, technology analyst Alken, the offer price is expected to reach € 20 euros.
The analyst explains that synergies respond to “the expansion of the fiber would accelerate optics for increased group sales force and increased customer base. Besides consolidation in Spain (it would go from 4-3 competitors), which would benefit the environment pricing, acquisition and retention costs to customers. “
Rech emphasizes that” Jazztel worth between 12 80 and 13 euros alone, ie without taking into account possible synergies that could arise from a corporate movement. ” He adds that “this assessment incorporates the cash flows that would be generated in 2017, based on the business plan announced by the company and which, incidentally, are being overcome.” Rech points out that the price is’ if we assume pay 12 times free cash flows for a company that grows above 5% per year. “
However, most analysts consulted recommends to go to the bid. This is the view of the experts: BANKINTER Create the bid price of Orange is very high: it involves paying a PER (price / earnings per share) of 33 times in 2015, compared with 16.5 times for the sector. BEKA FINANCE Go counteroffer very unlikely that another company given the amount offered and minor synergies with other group would Jazztel. BANK Sabadell have always bet that the union of Orange-Jazztel would occur sooner or later and believes that Telstra is no hook to fit the enlarged group. SAVINGS CORPORATION Discard the operation would find regulatory hurdles, because the market share of the new group is in line with Vodafone which will have after buying Ono.
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