Takeover offer for Australia's APM Human Services "opportunistic" - Morningstar

APM Human Services International

19/02/2024 20:00

** Morningstar analysts say that the price offered for
Australia's APM Human Services  APM.AX  by CVC Asia Pacific
undervalues the company as a standalone business and is
opportunistic  
    ** The employment services firm rejected an A$1.47 billion
(A$1.60 per share) takeover offer from private equity firm CVC
Asia Pacific since the latter did not "sufficiently reflect its
fundamental value" 
    ** Morningstar remains confident of near-term outlook for
co, although many headwinds exist such as tight labour market
and lack of ability to attract and retain health professionals
    ** The broker sees relatively strong H2 FY2024 earnings
performance for APM based on recently implemented operational
efficiencies and organic growth of health business 
    ** Morningstar leaves fair value estimate of A$2.40 per
share unchanged, sets "high" uncertainty rating 
    ** Four of six analysts rate the stock "buy" or higher, two
"hold" and none "sell" or lower; their median PT is A$1.43 –
LSEG data
    ** The stock has remained flat this year, as of last close

 (Reporting by Archishma Iyer in Bengaluru)
 ((Archishma.Iyer@thomsonreuters.com;))